Virtu eyes China as the US trading giant positions itself to enter the world’s second-largest economy through market-making opportunities right now. The New York-based firm is actively exploring China’s $520 billion ETF market, which Beijing is considering opening to Western market makers for the first time, and this could be a significant game-changer for the industry.
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Virtu’s Expansion Into China’s ETF, Trading & Market-Making Space
China’s ETF market represents a massive opportunity that has attracted major Western trading firms at the time of writing. Back in April, China was considering opening its ETF market to Western market makers, and this move could draw firms like Citadel Securities, Jane Street, and also Amsterdam-based Optiver.
Brett Fairclough, co-president and co-chief operating officer of Virtu, was clear about the fact that
“China presents a long-term growth opportunity for Virtu due to its scale and increasing openness.”
Strategic Market Entry Plans
Market-making in China is being actively pursued by the firm right now, and the company has taken concrete steps toward this goal. Two sources familiar with the matter confirmed that Virtu eyes China through plans to set up teams in mainland China and participate in securities market making.
Virtu Financial’s expansion has already begun with hiring activities in China, according to one source who declined to be named as they were not authorized to speak to the media. The exact hiring numbers remain undisclosed at this time, and Fairclough did not comment on the company’s specific hiring plans in the region.
Regional Growth Strategy
China’s ETF market entry would extend Virtu’s existing Asian operations, and this makes strategic sense for the company. The firm maintains offices in Singapore, Hong Kong, and also Sydney, providing liquidity across global equities, fixed income, currencies and cryptocurrencies.
Fairclough also added:
“A potential onshore Chinese presence would be a natural extension of Virtu’s Asia operations and aligns with its disciplined global expansion approach.”
He mentioned that the Singapore hub “will continue to support any regional growth initiatives,” including its growing presence in India and China.
Market Challenges and Opportunities
Virtu eyes China amid complex geopolitical conditions. Heightened Sino-US trade tensions cloud the outlook for Wall Street firms’ operations, and sluggish economic growth has led some foreign firms in China to scale back their operations recently.
However, Beijing has committed to allowing foreign firms in China greater access to onshore capital markets, and this commitment has managed to attract interest in some niche segments. Citadel Securities applied in January to establish a securities broker unit in China, showing that major players are still willing to make investments despite the challenges.
Competitive Position
Virtu handles around 25% of US retail market orders, establishing it as one of the world’s largest trading and market-making firms right now. The Nasdaq-listed company’s track record in market-making in China positions it well to compete as Beijing implements policies attracting foreign participation.
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Virtu’s expansion represents part of the firm’s broader strategy to capitalize on emerging opportunities in high-growth regions. With China’s ETF market valued at $520 billion and growing, the opportunity justifies navigating the complexities of market entry as the company continues its global expansion efforts.