The European Securities and Markets Authority’s (ESMA) May 2 announcement that 220 of the 71,000 corporate credit and government bonds traded in the EU during Q1 2018 were deemed liquid came as little surprise to any of the market’s participants, globally.
Willis Bruckermann, GreySpark Partners Analyst Consultant, examines how high- and low-touch trading have changed in the past decade, and some of the implications thereof for the future structure of the flow equities market.
Since the 1980s, the electronification of financial markets trading resulted in innovations in computer hardware and software design that frequently tested the limits of what the technology that is utilised by markets participants – specifically, asset managers, hedge funds, institutional investors and investment banks – in their every-day operations can achieve.
Despite recent signs that global equities market volatility is showing signs of life once again after a period of prolonged slumber, investment bank execution franchises should remain mindful of the long-term imperative to continue to reduce costs at the margins across the whole of the brokerage business.
When considering the potential impact that the EU’s General Data Protection Regulation (GDPR) could have on the entirety of the bloc’s corporate economic sector, look no further than the findings of an April 2017 Veritas survey in which 20% of the 900 respondents – characterised as “senior business decision makers” – expressed concern that, globally, non-compliance could put them out of business.
As the efficacy of long-established cost-savings and efficiency efforts dry up, financial institutions seeking to transform their business models are increasingly looking to automation technologies to support process workflow optimisation.
The surging value of cryptocurrencies has featured in many media reports over the summer of 2017. Specifically, the value of Bitcoin quintupled between January 2017 and September 2017, when it reached a valuation of just under USD 5,000 per Bitcoin.
The European Market Infrastructure Regulation (EMIR), which was adopted into EU law in 2012 as a new piece of legislation governing OTC derivative trading and transparency across the bloc, is set for a series of updates by the end of 2017.
The so-called digital transformation of the ways in which investment banks operate as businesses overall began more than one decade ago. However, not all of the technology that banks needed in order to fully realise this transformation has always been readily available, and the last five-to-10 years have seen a significant rate of growth in the data processing and analytics needed to realise ideas that have been gestating for some time.
Over the past 18 months, GreySpark Partners has observed that the structure of the flow FX market – consisting of spot FX and vanilla OTC swaps, forwards and futures – has continued its incremental evolution.
Investment banks have traditionally structured their operational activities along discrete business lines, which were traditionally split up by asset class and geography.