1. Algo Trading - “To Infinity and beyond” Technology Challenges bharat.shah@tcs.com TCS BαNCS

2. CONFIDENTIAL - 2 - Asia – The Retail Market Change the rules Gambling = Exploring fortune

3. CONFIDENTIAL - 3 - Algo Trading - “To Infinity and beyond” o Electronic Trading – Global and Asia market o Asia Market Challenges o Algorithmic trading o Technology challenges

4. CONFIDENTIAL - 4 - Electronic Trading – Global and Asia Market Asia market : Fragmentation low

5. CONFIDENTIAL - 5 - Electronic Trading – Global and Asia Market Adoption of advance execution slow Source: Celent

6. CONFIDENTIAL - 6 - Electronic Trading – Global and Asia Market HFT adoption is slow, Cost of execution is high Source: Credit Suisse Cost of execution

7. CONFIDENTIAL - 7 - o Electronic Trading – Global and Asia market o Asia Market Challenges o Algorithmic trading o Technology challenges Algo Trading - “To Infinity and beyond” Trigger

8. CONFIDENTIAL - 8 - Asia Market - Challenges Low liquidity, tighter spread Source: Credit Suisse

9. CONFIDENTIAL - 9 - Asia Market - Challenges o Exchange driven markets, low fragmentation (Fear of flash crash) o Retail participation, need for institutional market (ATS, Dark pool) o Multi-asset, multi-market trading platforms o Pan-Asia market connectivity? o Best execution regulation (MiFID, NMS) o Pre-trade risk controls ASEAN Market Trading Link

10. CONFIDENTIAL - 10 - Algo Trading - “To Infinity and beyond” o Electronic Trading – Global and Asia market o Asia Market Challenges o Algorithmic trading o Technology challenges

11. CONFIDENTIAL - 11 - Algorithmic Trading – positive momentum o Algo trading on rise o Execution algos - reducing market impact o Situational algos – dynamic conditions o Hedging algos “We are told to do more, do it better, and do it with fewer people…”

12. CONFIDENTIAL - 12 - o Pre-trade, post-trade, execution integration o Low latency – decider for profit or loss ? o Back testing with tick by tick history data Algorithmic Trading Market Data Analyzing data from different venues Order Generation What to buy and sell - when Execution Strategy How to buy and sell - where Direct Access Getting to the right venue Matching Matching buyers & sellers Trade Cost Analysis Did you made the right decision? Quant Models Algorithmic Trading DMA Pre Trade AnalyticsPost Trade AnalyticsTrade Monitoring

13. CONFIDENTIAL - 13 - o Buy side control – DMA, DSA o Pre-trade risk controls o Multiple sell side connectivity o Which algo to use for executing order? o White box and black box approach o Multi-asset Algorithmic Trading

14. CONFIDENTIAL - 14 - Algo Trading - “To Infinity and beyond” o Electronic Trading – Global and Asia market o Asia Market Challenges o Algorithmic trading o Technology challenges

15. CONFIDENTIAL - 15 - Technology Challenges o Low latency for HFT, Algo trading (Internal) o Market data latency, standards, Quality, Size o Co-location – multiple exchanges o Exchange approval process

16. CONFIDENTIAL - 16 - Technology Challenges o Algo with news intelligence, fundamental data o Trader “Gut feel” – Interaction during Algo execution o Retail investor protection, Extending trading power to Retail? o High performance – Firmware, Super computer, Giga bit switches o Pre-trade risk control – Algo performance o Algo on Algo o Algo White box/Black box – Work bench

17. CONFIDENTIAL - 17 - Summary o Exchange/Regulator controlled markets (HFT, Dark pool will be slow track) o Algorithmic trading will rise – need for end to end low latency o Focus required on Market infrastructure improvement (Latency) o Pre-trade risk controls, Stock level Circuit breakers o Pan-Asia clearing, Regulation to be in place before trading connectivity o Algo workbench based solution – White box/Blackbox

18. CONFIDENTIAL - 18 - Banking | Capital Markets | Insurance Device & Simulate Predefined Algorithms Build New Algos Trading Destinations Exchange MTFs, ECNs Dark Pools Crossing Networks Pre-Trade Analytics Overall Risk & Compliance Order Mgmt System Master Data Reporting & MIS Market Data ALGO EXECUTION Dashboard Monitoring Simulate & Back Test Customize Algo Parameters Customize Dashboards ALGO WORKBENCH Algo Orders over FIX Exchange Commercial Vendors Other Data Sources Data Feeds Market Data Algo Trading Solution