Bridging the gap

Why we founded ChinaFICC

 

I first met Bujar Bivolaku, my co-founder, in early 2018. Although we started our careers at different ends of the financial markets experience (Bujar a developer, me an Interest Rate Swaps broker), our career paths had converged in the middle as Product Managers, with both of us playing interesting roles in the automation and subsequent regulation of markets. Importantly we both brought our ‘little black books’ of valuable contacts, in particular Bujar, with his years spent in Asia working as point person between Thomson Reuters and The Chinese bond and foreign exchange regulator CFETS for their original FX trading platform and with other clients across China. 

 

When we met, our premise was quite simple. It was clear that China was now opening its vast financial markets to international investors at pace and we had both surmised that connecting Western participants would be fraught with a bunch of unique challenges – such as unorthodox workflows, reference data, settlement reconciliations across borders, and exchange controls – which would need to be tackled if international participation was going to scale at a rate that would meet investor demand. 

 

Moreover, we knew that adapting existing systems and business processes comes with significant time, cost and risk considerations for participants. For markets already so large, investor demand so strong and a rule set that is still evolving (and liberalising), then centralised, product-based solutions that could handle transitions seamlessly would be by far the most efficient way to keep costs and risk under control. 

Why ChinaFICC

 

China now has the second largest bond and equity markets in the world (after the US), but foreign ownership is a fraction of its potential. This is rapidly changing as China carefully liberalises access for foreign investors via its “Access Schemes’. Foreign holdings are growing quickly, but short-term solutions will soon be exposed when volumes exceed the capacity to manually manage the current workflow constraints (across execution, settlement, data, and controls).

 

We founded ChinaFICC with the aim of removing existing challenges and thinking pre-emptively about the solutions needed for the future. We came to the conclusion that there is a need for a central, networked infrastructure that bridges the process and information gaps between the international and Chinese marketplaces. We knew well that incumbent Western infrastructure providers can be expensive, slow, lack the innovation to deliver what China needs, and are conflicted with other priorities. There is a significant opportunity for a company that is unencumbered by legacy technology and has the relationships and know-how to work with Chinese stakeholders to ensure that solutions are robust and future-proofed. In other words, we felt strongly that there is a need for a company such as ChinaFICC.

 

Our mission when we met remains the same to this day. ChinaFICC exists to support the internationalisation of China’s financial markets by leveraging our decades of technical experience and relationships with financial institutions, Chinese state-owned enterprises and across global financial marketplaces. We aim to achieve this by developing and managing the products needed to ensure that international participation can scale at pace, free from avoidable costs, risks and capacity limitations.

 

We will collaborate with all stakeholders and bring the buy-side, sell-side, custodians and regulators together by delivering an ecosystem of efficient solutions which allow users to seamlessly benefit as the technical capabilities and access rules evolve.

Our products deliver solutions across execution and trade management for international investors in the Chinese market to grow their exposure to these important markets – increasing automation and reducing cost and risk. We employ the latest technologies to ensure rapid product delivery, while maintaining a “constant innovation” corporate philosophy.

 

We use a dynamic and scalable technology architecture, capable of integration with innovation-driven third-party vendors, using the latest knowledge on a centralised platform that is unencumbered by legacy systems. We build flexible, interconnected solutions so that all users can benefit from an ecosystem of product-driven services. We are here to solve problems because value can only be created in this manner.

 

At ChinaFICC, we aim to reduce the cost, risk and competition issues for all international participants in China’s vast financial markets. Our first use-case seeks to address the access, control and competitive issues surrounding participation in the domestic RMB market (CNY) for Bond and Equity international investors.

 

If you need help accessing China or would like to hear more about our solutions and roadmap, then we’d love to hear from you. Drop us a line at info@nullchinaficc.global.

Peter Best