Trends in Equities Trading 2019

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The Juice Runs Dry for the Sellside’s Squeezed Middle

This report reviews the state of sellside Tier I and Tier II cash equities and equities derivatives sales and trading franchises, examining the so-called squeezed middle of franchises that has formed since the financial crisis. In 2019, the economic precariousness of the squeezed middle – those stuck between the small number of volume-driven global flow monsters and a long tail of niche specialists – is coming to a head and even formerly leading Tier I global investment banks count amongst its ranks. The impacts of these developments are profound, both from an organisational strategy and role perspective, as well as its implications for technology requirements going forward.

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Investment banks have become increasingly disintermediated from the most valuable parts of clients’ trading lifecycles and, consequently, historical business models focused on highly manual, labour-intensive client servicing across a wide range of products, geographies and services have become economically unviable, with most banks forced to pursue niche strategies instead. The report details this specialisation of individual sellside cash equities and listed equities derivatives franchises over the past decade

Shifting business model realities for managing client relationships and investment banks’ role in the client trading lifecycle are profound. GreySpark explores the paradigm shifts involved in the creation of successful digital investment banking franchises in the cash equities and listed equities derivatives space. These shifts further result in significant changes to banks’ technology stack requirements as they enter the third wave of sellside listed equities product technology acquisition, focused on replacing legacy solutions – both in-house and vendor-provided – with new fit-for-purpose that address both current market realities and future-proof institutions technology stacks in light of not only the business changes, but larger technology trends in the capital markets space.

Published on: 4 Dec, 2019
  • 1.0 Sellside Cash Equities & Equities Derivatives Trading: The Juice Runs Dry
    • 1.1 Getting Out of Dodge: Post-financial Crisis Regulatory Adaptation & Resulting Commercial Pressures
    • 1.2 The Erosion of the Four Investment Banking Industry Cash Equities Sales & Trading Pillars
  • 2.0 The Future of High-touch Sellside Cash Equities Buyside Client Services
    • 2.1 Supporting Cash Equities Execution Technological Sophistication on the Buyside
    • 2.2 What is a Sellside Cash Equities Sales-Trader, Anyway?
  • 3.0 The Future of Sellside Cash Equities Trading Technology
    • 3.1 Mind the (Shrinking) Gap: Vendor Solution Utilisation in the Sellside Cash Equities Trading Technology Stack
    • 3.2 Functionality, Not Systems
  • 4.0 Appendices
    • 4.1 Table of Figures

Report Data & Figures

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