Latest Blog Posts

Keeping up with the exchanges – the ETD challenge

Bill Blythe, Gresham

Apr 22, 2015

Trading volumes in exchange-traded derivatives (ETDs) continue to rise (up 30% from pre-crash volumes). During a recent pilot study at a large securities clearing house Gresham CTC was tasked with processing 20 million trades in 14 minutes as a minimum requirement for processing ETD transactions.  I’m pleased to say that we passed with flying colours, but it does highlight the increasing volumes. But at the same time many firms have failed to make a corresponding investment in their post-trade processing systems, attempting to stretch their legacy technology to accommodate ever more complex instruments. read more

FX Trading – Seven Trends the Buy-Side Needs to Consider

Ivy Schmerken, FlexTrade

Apr 21, 2015

It’s hard to escape the headlines about FX trading lately. Words such as rigging, currency manipulation, chat rooms and billion dollar fines are grabbing attention and alarming many buy-side customers. It’s an environment that could give pause to investors, so it’s interesting to note that, in spite of these transgressions, the $5.3 trillion foreign exchange market is growing, driven by new market participants, beyond dealers. According to the latest Bank for International Settlements Triennial Survey of Central Banks, small banks accounted for 24 % of the turnover, followed by institutional investors such as pension funds and insurance companies at 11%, and hedge funds and proprietary trading firms another 11%. read more

OneTickCLOUD, Managed Services across Global Markets

Louis Lovas

Apr 13, 2015

The seduction of low-cost yet massive compute power creates overwhelming interest in cloud technology. Momentum is building fast within the trading and investment business to benefit from the $18B cloud computing industry.  In a survey conducted by OneMarketData respondents overwhelmingly look to avail themselves of all that cloud offers.  Over 77 percent expect to jump headlong into cloud platforms. The allure of cloud computing is lower technology costs and improved profitability that comes from the enhanced capabilities enabled by greater compute power and access to a store house of deep market history. read more

Backdoor Unbundling

Steve Grob, Fidessa

Apr 09, 2015

I was relaxing on my way home on the 7.02 from Waterloo last night when I came across Nick Goodway’s excellent article in the London Evening Standard on the impact of unbundling and research procurement. As everyone knows, ESMA wants to make sure that transparency rules the day when it comes to how investment managers use client money, especially when it comes to paying for research via trading commissions. A noble motive indeed but one that, as Nick points out, is fraught with unintended consequences. read more

ESMA stops short of a no-action letter

Anne Plested, Fidessa

Mar 30, 2015

Having taken several years to get through the review of MiFID, it was interesting to hear from ESMA chair Steven Maijoor last week that there is an appetite to “explore the mechanisms to address regulatory adjustments in a flexible and agile manner”. Neither national authorities nor ESMA have any tool like the ‘no-action letter’ employed in the US. Given that the rules may not be completely finalised until a year (possibly less) before the MiFID II January 2017 go-live date there will be huge implementation challenges. read more

Left in the dark

Christian Voigt, Fidessa

Mar 26, 2015

Currently, it doesn’t really matter whether dark trades are executed under the reference price waiver (RP), large in scale waiver (LIS) or a negotiated trade waiver (NT). However, under MiFID II, the waiver flavour will make a significant difference. Whilst RP and parts of NT will become subject to the clunky double volume cap, LIS will not, so we may expect to see an increase in block trading. But how does an exchange flag a trade that matches a LIS order with an RP order? Coming up with an appropriate approach is now a pressing issue. read more

From Revolution to Evolution in the Search for Liquidity and Alpha

Greg Ludvik, FlexTrade

Mar 24, 2015

Smart Order Routing (SOR) has ebbed and flowed as a topic of interest in the financial industry.  Because the functionality has become commonplace in the market, its presence in institutional trading platforms has nearly become an afterthought.  But its necessity is without doubt, especially in light of the exponential growth of electronic trading, proliferation of order types and instructions, and fragmentation of liquidity. Revolution The launch of the first smart order router was a revolution in trading, allowing traders to access liquidity across multiple markets and get size done. read more

Change is the only constant

Anne Plested, Fidessa

Mar 19, 2015

The unbundling of payment for research is a top concern for the industry. There seems to be general acceptance that, one way or another, Europe is set on the soft dollar research market becoming a hard dollar one by January 2017. Despite calls for more clarity and the recent publication of the FCA discussion paper on the regime, opinion remains divided as to how the use of CSAs can evolve to survive as a payment mechanism. There’s no denying widespread change is already underway, in roughly the same direction of travel as MiFID II. read more