Top stories

ESMA provides implementing rules for MiFID II

Dec 19, 2014

The European Securities and Markets Authority (ESMA) has published today its final technical advice (TA) and launches a consultation on its draft regulatory technical and implementing standards (RTS/ ITS) regarding the implementation of the Markets in Financial Instruments Directive (MiFID II) and Regulation (MiFIR).

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IIROC publishes academic papers on impact of HFT

Dec 17, 2014

The Investment Industry Regulatory Organization of Canada (IIROC) today published academic papers from three of the four academic teams chosen to assess the impact of high frequency trading (HFT) and related activity on Canadian equity markets, as part of the final phase of IIROC’s comprehensive HFT Study.

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Linedata wins Best Fund Accounting Technology Platform in GC Awards

Dec 16, 2014
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PARIS, BOSTON, HONG KONG, LONDON - Linedata (NYSE Euronext: LIN), the global solutions provider dedicated to the investment management and credit industries, today announced that it had been named ‘Best Fund Accounting Technology Platform’ in Global Custodian’s Awards for Excellence North America 2014.

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Latest Blog Posts

Slave to a label?

Christian Voigt, Fidessa

Dec 18, 2014
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ESMA has just published a report on high-frequency trading (HFT) activity in EU equity markets. It’s good to see the regulator producing an empirical study on such a hotly-debated and emotive topic. Taking a sample of European stocks, and applying two possible definitions of HFT, ESMA estimates that between 24% and 43% of value traded is done by HFT. This sounds like a nice catchy headline, but it’s a little more complicated than that. Under its requirement to provide technical advice to the European Commission to specify the definition of HFT, ESMA proposed two different options in the MiFID II consultation paper; neither of those is applied in this particular study. With so many possible definitions, can ESMA’s most recent findings on the prevalence or otherwise of HFT have any practical meaning? Is it more a case of the results being driven by the underlying assumptions? This latest study simply reinforces my view that attempting to define HFT is not a fruitful endeavour and we shouldn’t get hung up on labels.
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FragPro all wrapped up for Christmas

Steve Grob, Fidessa

Dec 15, 2014
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Following on from my last blog on the subject, the guys at Fidessa Labs have now made the latest version of the Fragulator available. Despite its name FragPro is still free, and yet it contains a bunch of cool new features. These include the ability to view stocks or indices by order book or venue owner (e.g. LSE Group including Turquoise, or all Euronext venues), track dark pool volumes and a download capability too. My personal favourite, however, is what the guys called the ‘Pacman’ feature whereby you can turn different venues on and off simply by clicking on them in the pie chart key. There’s lots of other exciting stuff to explore too and we plan to make another release available soon. My thanks as always goes to the guys who built it and made it available – a truly outstanding effort in just three weeks (mental note: better make sure to buy them a festive mince pie or two next time I visit). Anyway, enjoy and keep letting us have your ideas for new features and we will keep adding them.
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How Much Does My FX Trading Cost?

Minor Huffman, SunGard

Dec 12, 2014
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Recent changes in the regulation of foreign exchange (FX), bonds and over-the-counter (OTC) products bring challenges to traders, corporate treasurers and portfolio managers when evaluating the performance of their trading decisions. For many firms, the question, “How much does my FX trading cost?” is a challenging one to answer. Unlike equities, pricing for most FX transactions, along with bonds and OTC derivatives, contains no explicit transaction costs. Market makers bundle transaction costs into the bid/offer spread charged to customers, often making it difficult to unbundle the charges to see the exact price paid to execute the trade. Recent headlines have brought increased attention to the legal and settlement costs incurred by a number of financial institutions in the $5.3 trillion per day FX marketplace. In addition, fragmentation of liquidity and reduced trading capital from banks are further intensifying firms’ scrutiny over trading costs and pressure to reduce them. Regulatory changes due to the implementation of Dodd-Frank across a wide range of OTC derivatives have brought unprecedented changes to the trading environment. The traditional market makers for FX face increased capital requirements for trading activities. At the same time, FX customers have lost confidence in traditional execution methods, such as reliance on custody bank execution and FX fixing orders. The traditional participants in the market are pulling back due to increased cost of capital, while investors and dealers are considering the move from principal to agency trading. Firms need improved analytics to evaluate the cost of executing trades via the myriad of existing options – such as direct trading relationships with banks and brokers, voice and electronic execution modes, order placement on ECNs, ATS and SEFs, and algorithmic execution. The expansion of platforms for trading exacerbates the challenge of understanding where the true market for an instrument stands and how to execute the trade to achieve the lowest total transaction cost. To get a full picture of the marketplace, firms need to scan and monitor across dozens of potential venues, including traditional bank trading platforms, ECNs and alternative market makers. While on the surface, liquidity appears deep, this can quickly evaporate under market stress. Therefore, transparency is essential. Firms need to understand the market environment throughout the life of the order, from the accumulation of the position to the posting and execution of the order. Market timing and market impact are important components, especially when moving large orders or when hedging positions around the release of economic indicators, market closes or FX fixing times.
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Interview

FIX Trading Community London Regional Event panel discussion: MiFID II By Tim Healy

Dec 09, 2014
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The FIX Trading Community held their London Regional Meeting at the BT Centre on December 2nd, with over 100 members from the buy- and sell-side, as well as vendor communities, to discuss latest thoughts on the MiFID II consultation process and the impact of regulation.

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Discussing Risk Data Strategy: An Interview with Philip Chamberlain

Sep 04, 2014
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Risk data is an area that has been largely overlooked for many years. Today the situation is different and the area is facing increasing regulatory scrutiny, as Systemically Important Financial Institutions (SIFIs) rush to comply with the Basel 239 Principles for Effective Risk Data Aggregation and Risk Reporting. An enterprise’s success depends on its ability to analyze risk data efficiently and effectively, in ways that uncover both risks and opportunities. Being able to extract and escalate critical risk information is nearly impossible without a robust risk management framework supported by a strong technology infrastructure.

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ATMonitor talks to ITG's Ian Domowitz about Best Execution

Jul 17, 2014
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Ian Domowitz, Managing Director of ITG and CEO of ITG Solutions Network, talks to ATMonitor about transparency in terms of institutional trading and how Best Execution can be achieved across different asset classes.

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Survey

How the buy-side rates broker services in 2014

Launch of The TRADE's inaugural Broker Services Survey - we are asking our buy-side readers to help us by completing a short questionnaire to summarize their broker relationships; which brokers they use and what those brokers are good at. Because we know that many traders use a large number of brokers for different reasons we are deliberately restricting the evaluations to six core criteria and allowing respondents to offer responses at a global, regional or market level as they define their relationship. The result is intended to be more than a simple nomination (who do you use) but far from a detailed assessment of capabilities, which we consider would be unmanageable for many traders. Please click here to participate.

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Research

The Cost Of Liquidity In The FX Market

ITG

Oct 27, 2014
The Cost Of Liquidity In The FX Market

On July 3, 2013, the courts pronounced caveat emptor with respect to execution performance in the FX market. U.S. District Judge Denise Cote threw out a lawsuit, which accused JPMorgan Chase & Co. of breaching a fiduciary duty to custodial clients by charging “hidden and excessive mark-ups” on currency trades. Judge Lewis Kaplan dismissed a lawsuit directed at officials of Bank of New York Mellon, for ignoring “red flags” or knowing that trades were being processed at the worst or near-worst prices of the day.

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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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