On their most recent earnings call KCG execs mentioned declining revenues in APAC along with several departures from their Singapore office and restructuring management in that region. Does anyone have insight into why that would be the case?
As far as I know they are the largest non-bank participant by volume on several Australian markets and are also rumored to be quite active in KOSPI derivatives. As SGX members they are likely large traders in Nikkei 225 futures which had enormous Abenomics-driven volume and volatility for the year along with attractive trading opportunities against Japanese cash equities and Nikkei 225 products on other markets.
It seems strange that this business would be struggling. Is there increasing competition in the region? What products and markets are popular with prop trading groups? On the Japanese cash side it looks like alternative markets like Chi-X aren't capturing meaningful market share like they have in other regions so perhaps that is a driver? Australia's trade-at rule should be causing more attractive flow to hit the lit exchanges which would be positive for on-exchange market making.
These markets are expensive to trade and some have onerous regulatory issues that may not be conducive to automated market making but seems like overall opportunity increased year-on-year.