The big squeeze on trading: caught between Mifid II and a hard place

Ed's picks | Trading systems

By David Beach | 20 April 2018

This editor's picks analyses trading from all sides - the legislation, the emerging technologies and the best practice shared by the thought leaders in the bobsguide community.  

 

Technology, MiFID II and 2027: The changing face of the post-trade industry [3:30 mins]

"The Markets in Financial Instruments Directive (MiFID) II is the largest regulatory change to hit the financial services industry since the crisis. Although the legislation has been in effect since January 2018, the industry is still scrambling to put the infrastructure in place to meet the new transparency requirements. The far-reaching nature of MiFID II has meant mammoth overhauls for even the most basic back-office functions. This is particularly true in the data-heavy post-trade area, where buyers and sellers[...]"

 

How to simplify trade reconstruction [3:30 mins]

"Evolving regulatory requirements are resulting in complex challenges for financial institutions around the globe. No longer just a ‘nice to have’ requirement, the ability to quickly and accurately reconstruct trade records, and proactively spot compliance breaches is now essential to several departments in the business, including risk, operations and trade[...]"

 

The new OTC challenge: Optimizing collateral management in the front and middle office [4:00 mins]

"Over the counter (OTC) derivatives such as swaps and forwards are versatile and flexible instruments, used by investment managers globally for hedging unwanted foreign exchange (FX) and interest rate risk, implementing yield enhancement strategies and creating innovative factor-based investment products. But the lack of visibility into OTC derivatives was largely blamed for the 2008 financial crisis. This prompted regulatory initiatives that aim to mitigate counterparty credit risk by transitioning toward[...]"

 

Solving buy-side trading challenges with effective analytics [3:20 mins]

"Nowadays, people find themselves living in very turbulent times, with political and economic instability all over the world, ranging from the impending Brexit to the escalation of trade tensions. As the financial sector is a litmus test to all world events, financial professionals must always be equipped with the right tools to evaluate risks and conduct sophisticated analyses under any circumstances.

Over the past few years, super low rates, lack of market liquidity, and the drying up of trading volume have reduced profitability for many buy-side firms. These challenges make it harder for portfolio managers to apply their existing trading strategies to collect alpha."

 

IBM, Barclays, Synswap point to blockchain banking transformation [Podcast, 49 mins.]

Capital and securities markets are among the banking sectors that could most enjoy the benefits of blockchain technology, according to speakers at a bobsguide webinar.

Keith Bear, global leader for financial markets at IBM, Dr Lee Braine, blockchain leader at Barclays, and Sophia Grami, CEO and co-founder of Synswap considered the use cases and weighed up just how transformational the technology could be within financial services.

The speakers agreed that taking existing processes and making them more efficient without disrupting systems too much would be key to blockchain adoption. Further, being able to display cost savings would be crucial to industry take up.

IBM, Barclays, Synswap point to blockchain banking transformation

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