Top stories

Deutsche Börse and The Stock Exchange of Thailand (SET) to cooperate

Apr 16, 2014

Both partners aim to enter into a cooperative relationship for the purpose of facilitating the development of the securities and derivatives markets between Thailand and Germany

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Clearstream strengthens commitment to Asia

Apr 16, 2014

Clearstream is working with the Taiwanese Central Securities Depository to develop a direct settlement link for global investors and issuers to access the Taiwanese international bond market such as the Renminbi-denominated “Formosa bond”

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CGQ release Integrated Client 2014

Apr 16, 2014

Latest iteration of the company’s flagship platform includes new analytic and data visualization features, broadened global market data coverage, trade execution enhancements, and performance improvements across the whole product

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Latest Blog Posts

Any port in a storm?

Anne Plested, Fidessa

Apr 16, 2014
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With the European Parliament’s formal adoption of MiFID II in yesterday’s plenary session, the next fundamental industry overhaul is on the horizon. Away from all the noise around HFT, I’ve been looking at the new trading obligation for investment firms that requires them to undertake all trades in shares on a regulated market or MTF, or as a systematic internaliser (SI). Any firm dealing on its own account to execute client orders will be required to register and trade as an SI, subject to certain threshold criteria yet to be defined by ESMA, and brokers crossing client orders will be obliged to trade on-venue, rather than report those trades as OTC. Depending on where this OTC volume shifts to, the new dark volume caps could be triggered under MiFID II. With their pre-trade transparency rules SIs are out of scope for these caps, so while they were largely ignored last time around they may now become a safer harbour for the broker community. That said, SIs are not a catch-all and firms’ business models will need to be aligned to meet the challenges of the new market structure under MiFID II.
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Are Comms Rooms Fit for Purpose?

Matthew Dent, VOLTA

Apr 07, 2014
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Discussions at this year’s Trade Tech conference are set to debate a wide range of subjects important to capital markets.  In addition to the inevitable debates around high frequency trading (HFT) or transaction cost analysis (TCA), we can anticipate discussion about reference data, socially-powered algorithms and multi-asset execution and order management systems.  A common thread will be sheer volume of data that each of these practices either uses or produces.  References to terabytes of data are being replaced with petabytes and even exabytes (1 million terabytes).  To give you an idea sense of scale, Google processes more than 1 petabyte (1PB) of data every hour.  As the worlds of exchanges and trading adopt ever-more sophisticated forms of trading technology, we can see that the regulatory requirements surrounding the storage and analysis of data will increase.  We believe this will create an unprecedented drive for financial services firms to store and process data in an ever-more efficient and cost-effective manner.   Does the industry have the robust, flexible and agile infrastructure needed to support data handling demands? From the many conversations we are having across the industry, we believe every financial services firm is considering how to better handle its data today, how to prepare for the exponential increase anticipated and how to ensure that it meets its ‘disaster recovery’ requirements and regulatory obligations. Firms face a choice.  Either to store data on-premise in their ‘comms room’, outsource to a data centre / collocation facility, or a combination of both.  It all depends on the business model of the firm, the ambition of anticipated growth and the scale of required data handling. Whatever the site, firms are seeking resilient, reliable and flexible storage.  Not only do financial services firms need a back-up ‘DR’ plan, but the sites themselves must be fully resilient and backed up.  Confidence is critical. Can comms room continue to cut it? We would say this wouldn’t we, but we are not alone in this claim.   Data centres are deemed to be an essential part of financial and industry infrastructure: the nerve centres of modern business, housing the servers, storage and networks.  This is partly due to the scale of the demand as the industry becomes ever more electronic, partly due to the efficiencies on offer. As every CFO and CTO will testify, resources need to be managed diligently today and managing the certain uncertainty of any financial services data requirements tomorrow, needs careful consideration and cost control. Our discussions with financial services firms weighing up comms rooms versus data centre options focus on a number of requirements ranging from internal resource and expertise, to cost management, resilience of power and connectivity and also location.  Each firm will put different store on their storage and management needs, but broadly speaking they all outline the following requirements: Technology & Expertise The amount of in-house technology - including power and cooling – combined with the on-going human expertise and resources to provide 24 x 7 physical infrastructure management and support can represent a considerable cost.   Moreover, these costs and resources might better be deployed elsewhere and contribute instead to the core revenue-generating function of the firm. Firms running their own comms rooms must be confident that their technicians are well-informed about the latest changes in data centre technologies, which are becoming increasingly efficient and are quickly deployed in a purpose built hosting environment. Resilient power IT infrastructure and data management place a huge demand on facilities in terms of power and cooling and the costs to deliver a resilient infrastructure can be prohibitive.  Access to a resilient and diverse power supply is critical to minimise any potential down-time. By design, a data centres inherently offer an uninterruptable power supply.  To give a sense of what this means, our tier 3 Central London facility in Great Sutton Street offers diverse 33kV power supply of 9.6MW from not one, but two independent substations of the national grid. A large proportion of London would have to suffer an outage before we would need to invoke our back-up generators. Diverse low-latency connectivity Domestic and international links are important when accessing the global financial markets and firms are looking for diverse carrier feeds to ensure the fastest, most effective trading routes and data feeds.  Connecting these feeds into in-house facilities can be a challenge, whereas, by nature, data centres have multiple carriers with diverse links already in place. Experience has taught us that on the whole, suppliers are quicker to deploy and support the connections to data centres than individual sites – we put that down to the benefits of scale. Flexibility & Scalability It is interesting to note that many financial services firms are employing heads of data and data strategists.  Heads of Technology are considering how to handle the scale and inevitable growth of data and we talk to many firms about the constraints they are facing and can anticipate.  Can their comms room handle the data requirements today?  Do they have the space and facilities to handle future expansion both in terms of rack space, power, cooling and internal and external connectivity? Scaling up at the right pace can be a gamble.  Empty facilities waiting to be filled cost money.  Overfilled spaces run the risk of being adversely impacted by operating in sub-optimum conditions. Security & Location It is interesting to note that financial firms are also looking at data in different ways.  What types of data should be kept on-site?  What can be housed in an outsourced data centre?  Regulatory and security obligations tend to underpin these discussions and we have seen a lot of interest from firms attracted by the convenience of our central London location, our security procedures and protocols, as well as the choice of connectivity and resilient power. Time will tell As firms are considering their data management, storage and handling strategies they are considering how to support and serve the growth at the right pace and in a way which will immunise them against having to over-invest in order to stay on top of technological developments.  Whether this is a full in-housed approach, a hybrid approach with data centre support,  Trade Tech will be a-buzz with debate about how the players in multi-asset class trading need to innovate and adopt technology, and core to this will be how the industry and the firms within it, approach data management.
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Algo identifiers galore

Christian Voigt, Fidessa

Apr 04, 2014
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With the German algo ID mandatory from 1st April, I was prompted to scan the latest MiFID II texts in this regard. Member states must require exchanges to be able to identify the different algorithms used for generating orders (Art. 51.6) which, on a high level, sounds just like the German HFT Act. To make things even more complex, MiFIR requires investment firms to identify in their transaction reports the “computer algorithms [.…] responsible for the investment decision” (Art. 23.3). So this includes not just the exchange members we already knew about, but also the buy-side. While it’s not entirely clear that the MiFIR and MiFID II algo IDs are the same, ESMA does at least have a mandate to provide guidance on the former, while it has no such mandate to harmonise the latter across Europe. Since the EU has 28 member states with around 250 licensed trading venues, let’s see just how many different algo IDs we can collectively define!
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Interview

ATMonitor talks to Matthew Coupe of NICE Actimize at the FIX EMEA Trading Conference 2014

Mar 28, 2014
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FIX is an industry standard that enables transaction messaging to be automated and thereby enables more and more efficient trading to take place. It doesn’t matter what asset class it is, you still need to be able to speak the same language in order to trade. So if we go back to a basic market, before we had financial markets, if I was speaking English and the other guy was speaking Italian, it’s very unlikely that I’m going to be able to trade in an effective and efficient way.

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ATMonitor speaks with Sassan Danesh of Etrading Software at the FIX EMEA Trading Conference 2014

Mar 26, 2014
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For the last five years there’s been a lot of regulatory emphasis on fixed income and OTC markets generally (which covers both FX and fixed income), probably more on fixed income than on FX. So that mirrors FIX’s focus as well. Whilst we’re involved in both, there’s been more activity on fixed income because the derivative side of fixed income was the original trigger for all the regulatory scrutiny.

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ATMonitor talks with Volta at the launch of their new Data Centre

Sep 30, 2013
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Volta's Julian King talks to us at the opening of their new data centre and discusses what this means for the financial services community in the City of London.

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Survey

The Trade 2014 Survey of Algorithmic Trading

The Trade in conjunction with AT Monitor is once again conducting its annual review of algorithmic trading services worldwide. With hundreds of traders offering more than 1500 evaluations, over thirty different providers of algorithmic trading services, this Survey is provides and industry leading snapshot of the state of the business at the start of each year. To take part and complete the survey please click here.

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Research

What Makes an Exchange a Unique Institution?

Ian Domowitz, Managing Director, Head of Analytics, ITG

Apr 15, 2014

The uniqueness of exchanges is resurfacing as a matter of public policy. This is nowhere more apparent than in the case of the proposed introduction of Benchmark Orders by Nasdaq, and in the debate surrounding monetary damages in the case of the Facebook IPO

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Video showcase

Introducing ATMonitor video services

Professional, cost effective, fast turnaround. Promote your brand via executive interviews, product showcase, event interviews, thought leadership and client testimonials. read more

Donal Byrne, CEO of Corvil talks about the New Norm for Trading

Donal Donal Byrne speaks about the challenges of managing speed, risk and cost of modern electronic trading systems for the mainstream of the market and how Corvil is helping. read more

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