Latest Blog Posts

Keeping key-person risk at bay and removing manual processes

Neil Vernon

Jul 30, 2013

The reliance on staff to deal with manual reconciliations and multiple systems is about to reach its tipping point. With headcount reduction and cost cutting, firms are under increasing pressure to automate their reconciliation processes. This combined with key-person risk where recs processes are known to an individual or a small contingent leads to a significant source of operational risk.  In the second part of the series from the Aite Group benchmark survey, these challenges are put under the spotlight. read more

A European Consolidated Tape – How Much Longer Must We Wait?

David Morgan, SunGard

Jul 30, 2013

European equity brokers face a number of challenges during the current ‘interim’ between the original MiFID Directive of 2007 and its MiFID 2 successor, as discussed in a new SunGard white paper.  The interim period is unfortunately becoming steadily longer as debate on the details of MiFID 2 and MiFIR grinds on, with implementation unlikely before 2015 at the earliest. Recent progress by EU governments still leaves open several points of contention with the Parliament. In the meantime, we have to live with a market structure that is at least partly dysfunctional: MiFID 1 achieved its objective of creating competition between trading and clearing venues, but failed to provide the transparency that market participants need. read more

Not even wrong

Steve Grob, Fidessa

Jul 26, 2013

Gently easing my way back into the daily grind after my annual vacation I came across the report that MPs in London are proposing to tax HFT. They must have been drinking more sangria than I have over the past few weeks. For a start, any tax aimed at changing behaviour needs to be very clear about what behaviour it is targeting and the preferred outcome it is trying to achieve. As everyone knows, HFT has no formal definition. The politicians say they want to prevent investors taking very short-term positions – but what about day traders, what about electronic market makers that basically provide the oil that lubricates nearly every market worldwide? Second, there is no definitive proof that HFT is actually harmful to markets. read more

Five, Six, SEFen, Eight....The dance around the new Swap Execution Facility rules

Joe Pickel, IPC

Jul 25, 2013
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You’d think that now Title VII of the CFTC’s OTC trading rules passed – that some long-awaited clarity would arrive to derivatives trading.   Expect no clear skies yet.   While the regulatory chiefs codified the rules themselves we, as an industry, begin the ardent task of interpreting them. Some players have joined this noble cause by entering new areas, atypical to their market focus, by registering as Swap Execution Facilities (SEFs) with the goal of harnessing the new demand – mandated down from the OTC Olympus. read more

Facing FATCA: Unravelling the IT solution confusion

Colin Camp, Dion Global Solutions

Jul 25, 2013
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Financial institutions are finally coming to terms with the reality of FATCA, recognising that the new regulatory regime is more than simple KYC-plus. They must now decide how to address the demand placed upon them. Despite initial beliefs that FATCA requires just enhanced data checking and storage capabilities, it is clear that the regulations touch multiple areas of the business. As such, FATCA demands a four-stage response, which can be summarised as follows: ·         Identification of relevant clients by checking data against specific indicia for both existing and new accounts ·         Remedial case management for identified accounts and/or missing data, including document storage ·         Calculating withholding tax as required ·         Amalgamated reporting on transactions and balances to the IRS and other tax bodies and clients This requirement places significant pressure on processes and workflows throughout the business. read more

Is there a doctor in the house?

Christian Voigt, Fidessa

Jul 24, 2013

These days there is no shortage of discussion among practitioners and legislators on how to develop financial markets in the future. And sometimes, like with any old bickering couple, all it takes is a third party perspective to find some common ground, which in this case might just be the academics. As proud supporter of the Sixth Erasmus Liquidity Conference taking place in Rotterdam next month, Fidessa will be presenting the Doctoral Student Award acknowledging the best paper from promising academic talents. read more

Facing FATCA: Facts and Fiction

Colin Camp, Dion Global Solutions

Jul 23, 2013
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As important deadlines for the implementation of FATCA draw closer, there is still a troubling lack of awareness about what foreign financial institutions are really required to do. Many appear to be taking refuge behind popular myths about FATCA that have taken root in the industry. It is time these myths were resoundingly debunked, if institutions are to successfully navigate the waters of international regulation and benefit from the support that is available to them. Myth number 1: FATCA isn’t a major issue for institutions without many US clients This is perhaps the biggest misunderstanding doing the rounds and it’s a dangerous one for a number of reasons. read more

Industry Survey on the Impact of Social Media on Financial Markets

Louis Lovas

Jul 22, 2013

Commentary on social media outlets has reached peak levels. This year marks the seventh anniversary of Twitter and tweet volume now exceeds 400 million messages per day. Social media steps over traditional outlets to offer faster news delivery sprinkled with opinions, commentary and perspectives on business activity and political events. One glaring example was the public outrage over Rolling Stone’s now infamous choice for a cover photo.  If Werner Media  the publisher of Rolling Stone magazine was a publicly traded company their stock price would have plummeted following the social media berating heaped upon them. read more