Top stories

Nasdaq’s Blockchain Technology to Transform the Republic of Estonia’s e-Residency Shareholder Participation

Feb 12, 2016

Nasdaq (Nasdaq:NDAQ) and the Republic of Estonia have announced that Estonia’s e-Residency platform will be facilitating a blockchain-based e-voting service to allow shareholders of companies listed on Nasdaq’s Tallinn Stock Exchange, Estonia’s only regulated securities market, to vote in shareholder meetings. The country’s e-Residency platform is an electronic identity system used by both Estonian residents and those with business interests in the country to access government services through e-Residency digital authentication. The program marks the second official blockchain project Nasdaq is executing on after successfully delivering the first private securities issuance between an investor and company via Nasdaq Linq, its blockchain-enabled platform.

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Bats Chi-X Europe and Traiana Announce Link of Services, Enabling OTC Equity Trade Clearing

Feb 10, 2016

BATS Chi-X Europe (BATS), Europe’s largest stock exchange, and Traiana, a leading provider of pre-trade risk and post-trade processing solutions, today announced a joint service that will extend OTC equity trade CCP clearing to a greater number of market participants.

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Commission extends by one year the application date for the MiFID II package

Feb 10, 2016

The European Commission has proposed a one year extension to the entry into application of the revised Markets in Financial Instruments Directive, or MiFID II. This is to take account of the exceptional technical implementation challenges faced by regulators and market participants. The European Commission has today proposed granting national competent authorities and market participants one additional year to comply with the rules set out in the revised Markets in Financial Instruments Directive, known as MiFID II. The new deadline is 3 January 2018.

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Latest Blog Posts

MiFID II delay – a missed opportunity

Christian Voigt, Fidessa

Feb 10, 2016
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The European Commission’s long-awaited official proposal for a one year extension to the MiFID II deadline is finally published today. In short, application dates will be pushed back by one year, with the official go-live date now set for Wednesday 3rd January 2018. While the delay comes as a massive relief to many market participants and the regulators, it is also a missed opportunity. Brussels opted, again, to define a fixed deadline rather than a relative timeline (12 months after an event, for example). The recitals for the amending directive and regulation contain some far from subtle hints to ESMA’s advice that the new deadline assumes the transpositions and the relevant technical standards are delivered by mid-2016. What if that does not happen? Let’s just hope we don’t have to find out.
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Understanding the Growth of Merger Arbitrage: Part II

Mike Baradas, Bloomberg Tradebook

Feb 09, 2016
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Our previous post, “Understanding the Growth of Merger Arbitrage: Part I”, described how Merger Arbitrage traders can position themselves on the outcome of a merger cash deal.  Other deals will have deal payment terms with stock or a combination of cash and/or stock.  In 2015, 60% of the deal payment terms were with stock (22%), cash-or-stock (7%), or cash-and-stock (31%). We will demonstrate how a trader would take a position on a merger based on a stock or cash-stock combination payment terms. Tradebook’s PAIR Multi Asset platform launched in 2009 with a focus on arbitrage trading. Using optimized parameters and risk controls at the spread level and for each leg, PAIR<GO> continues to evolve into multiple asset classes and cross-asset strategies. A merger arbitrage position in a stock-for-stock or cash-stock deal involves going long the target company, and going short the acquirer, in anticipation of a deal completion.  For example, on June 24,2015, Koninklijke Ahold NV [AH NA Equity] announced the acquisition of Delhaize Group SA [DELB BB Equity] in a stock-for-stock transaction. Upon completion of the merger, Delhaize (the target) shareholders will receive 4.75 Ahold (the acquirer) ordinary shares for each share of DELB BB, which means the terms of the deal are: 1 DELB BB = 4.75 AH NA. As illustrated below, Delhaize may trade at a discount or a “spread” to the final deal price, due to the perceived risk of the deal being completed. Using the Merger Price Convention, the trader would enter the strategy parameters on the PAIR<GO> ticket below. Target = DELB BB Acquirer = AH NA Conversion ratio = 4.75 Setup spread = 2.40 Merger arbitrage traders may also want to trade the volatility of the deal spread during the day.  Setting up the spread (Buy DELB BB and Sell Short AH NA) when it is wide (i.e. 2.45), and Unwinding the spread (Sell DELB BB and Buy Cover AH NA) when it is tight (i.e. 2.25). This can easily be done on one PAIR ticket, as shown here. Workflow integration with the Bloomberg Professional terminal allows a trader to create a PAIR ticket with the deal terms from the M&A Arbitrage monitor MARB<GO>. The trader simply clicks on the deal, then clicks the link to Tradebook’s PAIR Ticket.  The deal terms: Target, Acquirer, Conversion ratio and Cash (if applicable), auto-populate the parameters in the PAIR<GO> ticket. The trader can then activate their spread order, or save the strategy as a template in the PAIR<GO> blotter for later use.
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Nosey neighbours

Christian Voigt, Fidessa

Feb 05, 2016
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Is MiFID II really going to force investment firms to pass around huge amounts of personal, identifiable information? Will competitors and counterparties learn way too much about your business? While many of these concerns may be overblown, there are some valid points to consider. The most obvious one relates to transaction reporting under RTS 22, which will require numerous items such as national IDs, algo IDs, names and birth dates to be submitted to the regulator. Given that firms have to report transactions only from their own perspective, and not that of their counterparties, that data goes no further than the regulator. Things change, however, if a buy-side asks its broker, or a sell-side asks the exchange, to do the transaction reporting for them. In those circumstances, this personal data does have to be exchanged. A second area of concern is around trading venue record keeping requirements. Under RTS 24, trading venues need to store details of the client of the exchange member and IDs identifying persons or algos responsible for the investment and execution decision. But because the decision IDs refer only to the member itself, it is unlikely that venues will learn of decision IDs beyond those of their own direct members. Then there are the issues around RTS 6, concerning DEA providers and their requirement to monitor DEA users. Under the new requirements providers will need to monitor trading strategies and single traders of DEA users. While some users might feel slightly uncomfortable flagging separate strategies, they may find some consolation in the fact that a unique and non-descriptive identifier is sufficient and the DEA provider doesn’t have to pass it on to the venue. While some data sharing is unavoidable, the impact is likely to be more manageable than many fear. So, unless you’re planning to creep out in the dead of night and dig a hole in the back yard, you should be able to keep those nosey neighbours at bay.
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Interview

FIX Trading Community London Regional Event Roundup

Dec 16, 2015
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FIX Trading Community held its final event of 2015, in what has been a packed year with 20 events around the world. The London Regional was held at the BT offices near St Paul’s, on the evening of the 3rd December. Joined by industry experts, a panel reviewed the outcomes of 2015 while looking towards 2016 on how best to prepare for the challenges ahead on a number of hot topics.

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Stephane Meslet discusses how Misys is aiding the buy-side

Jun 01, 2015
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ATMonitor speaks with Stephane Meslet at TradeTech Paris 2015. Stephane discusses some of the main challenges currently facing the buy-side and how Misy's is aiding clients in implementing the right solutions.

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Avelacom's Aleksey Larichev talks to ATMonitor

May 11, 2015
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ATMonitor talks with Aleksey Larichev, Director of Business Development at Avelacom. Speaking from TradeTech Paris 2015, Aleksey discusses Avelacom's low latency solutions to markets across Europe, Asia and Russia.

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Survey

Algorithmic Trading Survey 2016

Trading Survey The TRADE magazine in conjunction with ATMonitor, is once again running its industry leading survey of Algorithmic Trading Services. Now in its 9th year running, we invite the buy-side to comment on their use of electronic trading services and to rate their algo providers. Please rate your algos by completing the online questionnaire available here

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Research

Distributed ledger technology: Blackett review

Government Office for Science

Jan 19, 2016

Review looking at the future of distributed ledger (or block chain) technology. This report sets out the findings of a review exploring how distributed ledger technology can revolutionise services, both in government and the private sector.

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Video showcase

Corvil working with RSJ

Corvil Watch Michal Sanak, CIO, RSJ Algorithmic Trading discuss working with Corvil. read more

Corvil working with Tradition

Corvil Watch Yann L'Huillier, CIO, Tradition and Alex Krovina, CTO, Tradition discuss working with Corvil. read more

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