Top Stories of 2017: Best of Sell-Side Technology
Regulation may have dominated the headlines this year but advances in machine learning and artificial intelligence were also high on the agenda.
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As 2017 draws to a close it’s time to look back at some of the best analysis that Sell-Side Technology has to offer from the past 12 months.
It’s unsurprising that regulation has dominated the market over the last twelve months, with the arrival of Mifid II just a matter of weeks away and the prospect of the General Data Protection Regulation (GDPR) and the Fundamental Review of the Trading Book (FRTB) coming over the horizon.
While Brexit has thrown up a number of questions over the future of the European financial landscape, significant advancements in artificial intelligence and machine learning are driving investment banks to greater levels of technology innovation.
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Esma Panel: Arrival of Mifid II will be “Like Christmas”
Before he stepped down as CEO of the London Stock Exchange, Xavier Rolet said that the arrival of Mifid II’s new levels of market transparency was comparable to Christmas, or at least for the group’s clients. However, there are still technology-related issues to be addressed, with others warning against a race to the bottom in the name of transparency objectives.
Mifid Gears Grind into Motion as Systematic Internalizers Emerge
Designed to replace broker-crossing networks, the emergence of systematic internalizers (SIs) as part of Mifid II has been a contentious and ongoing issue. Banks, brokers and buy-sides alike have all registered as Sis ahead of January and calls for greater clarity from Esma as to how the rules will be upheld have only grown in volume as the year elapsed.
European Exchanges Emerge as Biggest Winners from Mifid II
Mifid II may be a sprawling, complex piece of regulation, but it is also been one of the main drivers behind European exchange’s business growth. Wiener Borse, Athens Stock Exchange, and Bats Europe (now CBOE) spoke to Sell-Side Technology about their plans to make the most of the new rules to attract new clients and built out their technology portfolios.
To Take Advantage of AI, a Multi-Faceted Approach is Necessary
Artificial Intelligence has been one of the most prominent technology trends of the year, but it’s the combination of cognitive technologies – including machine learning, natural-language processing and robotics – that will yield the greatest benefits, as machines and algorithms become more ubiquitous in the capital markets.
Robotics Strike Bum Note for Big Banks
Robotic process automation (RPA) has already made significant in-roads into banking middle-offices such as reconciliations, but some institutions haven’t been convinced by the technology yet. Disillusions over costs and inflexibility, especially compared with to alternative intelligence technologies, mean that RPA may have a limited shelf-life until more cognitive functions emerge.
Brexit Brings Boom to Bankenviertel as Tech Firms Eye Frankfurt
The reality of Brexit for many financial institutions is relocation to other European cities than London, and, for most, Frankfurt is top of the list of ideal destinations. Technology vendors and start-ups are also looking to follow in their footsteps, meaning London faces a tough future when it comes to attracting and retaining fintech talent in the future.
Taming the SGX: A Profile of Boon Chye Loh, Singapore Exchange’s CEO
Taking care of a stock exchange is no easy feat. It takes humility, strength and amusing life principles from certain animal groups to help navigate through challenging times. Wei-Shen Wong sits down with SGX CEO Boon Chye Loh to learn about those principles and how SGX is looking to expand.
Tech Challenges Loom as Europe Eyes London’s Clearinghouses
In June the European Commission unveiled new plans for supervising non-EU central counterparties (CCPs) after Brexit, including the possibility that UK-based clearinghouses may be forced to relocate to the eurozone. Although the proposed rules would only apply to systemically important clearinghouses, there would still be major legal, operational and technological challenges to overcome.
Banks Talking Big on Innovation Culture, Look Beyond Fintech
Every sell-side institution is operating an innovation lab or accelerator hub to drive improvements throughout its business operations, however most have yet to look beyond their own walls. While the focus on cultural change is still a necessary and ongoing task, banks have learned lessons about chasing fintech ideals and are starting to broaden their approach to technology innovation.
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Waters Wavelength Podcast Episode 51: Nasdaq CEO Adena Friedman
Former SST deputy editor Dan DeFrancesco spoke to Nasdaq CEO Adena Friedman, who took on the role at the start of this year. Friedman discusses Nasdaq’s use of artificial intelligence for market surveillance, how she sees exchanges evolving in the coming years and her black belt in taekwondo.
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More on Regulation
Northern Trust offers internal fund accounting, data tools to clients
Regulations and a mandate to enhance quality and transparency in a bid to improve the investor experience are pushing buy-side firms to have more oversight of their third-party providers.
EU firms press for faster move to T+1 after smooth US rollout
Following the example set by North America, 70% of attendees at a European hearing on shorter settlement cycles favored a Q4 2027 switch to next-day settlement.
Finra clears hurdle with CAT launch, but several others remain
Two major components of the consolidated audit trail are now in place. But wrangling over the CAT’s future continues.
Bloomberg, industry bodies push back on Cboe’s proposed OEMS rule change
Some industry bodies disagree with the options exchange’s proposal to carve its Silexx OEMS out of the SEC’s definition of an exchange facility and place it into a separate business line.
GenAI: US Fed reveals its five use cases
Internal sandbox used to assess viability and risks; coding and content generation on the agenda.
Zeros and ones: Industry contemplates T+0 as the next step
With the North American transition to T+1 settlement complete, same-day settlement could be the next goalpost set, though skeptics are many.
The IMD Wrap: Déjà vu as exchange data industry weighs its options
Max highlights some of WatersTechnology’s recent reporting on data costs and capacity issues facing the options industry, and asks, haven’t we seen this before somewhere?
FRTB data quality issues persist amid shifting implementation dates
Banks are finding market and reference data challenges posed by the FRTB’s standardized model tricky, compounded by uncertainty over when the regulation will take effect.