Latest Blog Posts

Aifmd: You can run, but you can't hide, says Linedata's Isadora Pardo

Isadora Pardo, Linedata

Jan 08, 2014

Isadora Pardo at Linedata in Luxembourg has outlined key considerations when considering solutions to facilitate compliance with the Alternative Investment Fund. Following the series of financial crises and failures, the cry for financial transparency and risk controls rang loud and clear. Regulators throughout Europe determined that broadening supervision on all financial products and participants in the financial sector would increase transparency and reduce risk for end investors. Unregulated investment structures, namely alternative investment funds, received a strong spotlight for new regulation and, in December 2012, the Alternative Investment Fund Managers Directive (Aifmd) was introduced. read more

All I want for Christmas

Anne Plested, Fidessa

Dec 20, 2013

It seems there’s to be no early MiFID II Christmas present as agreement on the Level 1 text slips into 2014. Publication of the final text is now hotly anticipated to be in January or February next year at the latest, to avoid running into the European parliamentary elections in May. Thereafter, as ESMA gets to grips with the tasks ahead, 2014 will bring discussion papers and consultations on the detail of the Level 2 technical standards over the next 12 to 18 months. So we are likely looking at 2016 for measures to apply (30 months from entry into force), although some regulation may apply earlier. read more

Quad-Party Clearing – a Winner’s Curse?

Henner Brüner, Capco

Dec 11, 2013
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Quad-Party Clearing – a buy-side focused clearing model – was widely perceived as an innovative solution for the clearing obligation under EMIR (European Market Infrastructure Regulation). The benefits for buy-side firms include efficiency, cost and risk reduction. However there’s a growing concern that these are outweighed by cost and risk factors of market infrastructure providers and sell-side institutions. For example, many experts anticipate a collateral crunch as a consequence of clearing obligation and risk mitigation techniques under EMIR, and liquidity requirements under Basel III. read more

Smoke-free markets

Christian Voigt, Fidessa

Dec 11, 2013

In recent months regulators have increased their focus on detecting and reporting possible incidents of market abuse. In Europe trading firms are expected to check for potential offences and report their suspicions to the regulator. As part of the MAD Review, the current list of indicators for market abuse will be promoted from a Level 3 document to the newLevel 1 regulation text, cementing the shift in focus. Additionally, ESMA is consulting on a number of new indicators for the Level 2 text. read more

Hong Kong braced for new rules

David Jenkins, Fidessa

Dec 10, 2013
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Electronic trading receives an increasing amount of regulatory attention around the world with international regulations and standards, such as the US SEC’s Market Access Rule and System Compliance and Integrity, IOSCO’s Principles of Electronic Trading and the ESMA guidelines in Europe, all defining specific requirements for automated trading environments. Hong Kong is now braced for the introduction of new rules, with the Securities and Futures Commission (SFC) setting new regulation around electronic trading which comes into effect on 1st January 2014. read more

Hitting the bullseye

Christian Voigt, Fidessa

Dec 02, 2013

According to recent press articles, the MiFID II trilogue has agreed on capping dark trading at an arbitrary 4% per venue and 8% overall market share. At the heart of the discussion around dark trading lies the role of transparency in the wider market. While one side claims that transparency is the only thing that can keep fragmented markets efficient, the other side worries about the undue restriction of legitimate and long-standing business practices. Whichever way you look at it, the new rules stand little chance of making either side happy. read more

The (Nordic) Future of Trading

Chris Skinner

Nov 27, 2013

We had our first meeting of the Financial Services Club Nordic Region last week at the British Embassy in Stockholm. Attended by around 70 senior figures from the financial markets across the region, we discussed the changes and implications of change in European investment markets, with a focus upon the processes involved in pre- and post- trade areas. The panel consisted of three luminaries who could relate to the topic in depth: Peter Randall, founder and former CEO of Chi-X Europe; Olof Neiglick, founder and former CEO of Burgundy; and Hanna Vainio, Deputy CEO of Euroclear Finland / Head of Infrastructure division, Euroclear Finland and Euroclear Sweden Peter kicked off proceedings and recounted the progress of MiFID and its impact on trading. read more

Europe’s OTF to follow the US’s SEF? Lessons in electronic swaps trading

Henner Brüner, Capco

Nov 26, 2013
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It is still probably too early to derive meaningful conclusions from the impact of Swap Execution Facilities (SEF) on trading behavior. However, European regulators and counterparties can learn from the US experience as they implement the European equivalent of SEF – Organized Trading Facilities (OTF) as part of the Markets in Financial Instruments Regulation (MiFIR). Although central clearing provides counterparty credit risk mitigation, SEF trading – because it will not become mandatory until the ‘made available to trade’ (MAT) rules are effective – is creating uncertainty and onboarding complexity rather than immediate economic benefits. read more