Latest Blog Posts

Drive vs. Trajectory – What Sailing Teaches Us About Trading Technology

Sheryl Baff, IPC

Oct 17, 2013
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Recently, the annual regatta, America’s Cup was held.   Each year, this series of sailing competitions is held under a longstanding tradition of teamwork and adversity. But what makes this race so compelling is that sailing, in itself, is a triumph against unforeseen forces: the weather, hidden obstacles, even time of day can affect the team’s line-of-site and overall trajectory.   Markets behave much in the same way that oceans do: surface views can be misleading, underlying currents can be tracked and harnessed—when the right charts are in place—and there are vast dependencies that can cause extreme changes in workflows, positions and the ability to stay competitive. read more

The New World of Central Clearing: CCP Margin Methodologies and Reporting

Michael Hallberg, SunGard

Oct 16, 2013
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The financial services industry is facing a number of changes, particularly with regard to central clearing processes. Financial firms are looking to minimize margin as much as possible as the cost of capital has risen for many institutions while demands on capital for margin and collateral have ballooned. Estimates vary for the peak expected capital to be deployed in this way in the near future, but they are all measured in units of trillions of USD. The listed derivatives model for charging margin has gone through a major transformation over the last few years. read more

‘Power down? We’re always on.’

Julian King, Volta

Oct 16, 2013
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Power is a big issue for data centres in fact it is perhaps their number one critical issue. They use a lot of it and making sure it stays on is a primary concern in ensuring that essential IT services are not interrupted. As society relies more and more on the electronic economy to conduct anything from mobile banking to trading the stock markets to storing our family photographs in the cloud, the more important it becomes to manage the risk that those services could be interrupted because of a failure in power supply. read more

Meaningful manoeuvres in the dark

Christian Voigt, Fidessa

Oct 15, 2013
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Dark pools around the globe are under constant regulatory scrutiny. The Australian and Canadian regulators now require dark trades to offer meaningful price improvement over lit markets. While Brussels-based technocrats still toy with the idea of volume caps, a recent open letter from a large group of industry representatives lobbied for the “meaningful improvement” rule to be applied in Europe too.  While this may appear easy to implement and a sensible compromise in the global debate, its impact would be far-reaching. read more

The New World of Central Clearing: SEF Trading Paving the Way for Change in OTC Derivatives

Tim Dodd, SunGard

Oct 15, 2013
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As over-the-counter derivatives shift into electronic trading, regulators must be able to navigate a transforming marketplace. In the U.S., regulators have found answers to questions about electronic trading of OTC derivatives contracts on swap execution facilities, enabling this market to settle down to a new paradigm with certainty taking hold in many areas. Now the focus is on implementation. The final “made available to trade” (MAT) landmark ruling voted in on May 16, 2013 by the CFTC has fundamentally changed the swaps market by effectively transferring, allocating and deferring significant power to SEFs to unilaterally bind the swaps market to mandatory participation. read more

CASS 7 Is Changing. Can You Keep Up?

Chris Errington, Gresham

Oct 14, 2013
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11 October was the deadline for CP13/5 responses on the FCA’s proposed changes to, amongst other things, CASS 7.  It’s highly likely that the FCA will get its way and push through material changes to the current CASS 7 Client money rules.  And rightly so as they want firms to reconcile client money faster, more accurately and with improved record keeping – all to ensure consumers are not let down by those holding their money. The client money reconciliations and recordkeeping section of the consultation (4. read more

Inching closer to the goal

Anne Plested, Fidessa

Oct 09, 2013
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ESMA’s work on the single rule book for EU financial markets, set out in its 2014 work programme, shows the bulk of MiFID II/MiFIR deliverables falling into the last quarter. With the Level 1 text still expected to be agreed by the end of 2013, the revision of MiFID and MAD will then unfold into advice, technical standards and guidelines over the following year. I’m interested to see how ESMA further develops its relationships with stakeholders and financial market participants during the coming consultation phase. read more

Swaps regulation arrives – with a bang and a whimper

Mark Brennan, Fidessa

Oct 02, 2013
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The swaps industry has for some time been fixated on October 2nd, the final date for compliance with SEF rules. But really the key date for market participants is when MAT (the “made available to trade” rule) kicks in and that, according to the industry consensus, is not likely to be before February 2014. With many of the 19 new SEFs only submitting their applications this past month, the drama surrounding the birth of this new market structure continues to play out. Going forward, SEFs will ‘list’ their contracts and, subject to CFTC approval, trades on MAT swaps that fall under the “Required Transactions” classification – that’s most vanilla IRSs and some CDS indices – must transact on SEFs, representing the final decisive break with the bi-lateral past. read more