State Street Report Takes The Pulse Of Buy-Side Firms Mandated To Clear OTC Derivatives : State Street’s SwapEx Files Registration With The CFTC To Become A Multi-Asset Swap Execution Facility


Buy-side firms are unprepared for new trading mechanisms, costs and increased complexity and should partner with established providers to adapt to an evolved OTC derivatives marketplace, according to research commissioned by State Street Corporation (NYSE: STT).

via Pocket http://www.mondovisione.com/media-and-resources/news/state-street-report-takes-the-pulse-of-buy-side-firms-mandated-to-clear-otc-deri/ July 31, 2013 at 07:13PM

The Iraq Stock Exchange Upgrades to NASDAQ OMX’s X-Stream Technology


NEW YORK and BAGHDAD, Iraq, June 28, 2013 (GLOBE NEWSWIRE) — The NASDAQ OMX Group (NDAQ) has entered an agreement with the Iraq Stock Exchange (ISX) to upgrade its current trading platform.

via Pocket http://finance.yahoo.com/news/iraq-stock-exchange-upgrades-nasdaq-110000449.html July 01, 2013 at 06:56PM

S&P Capital IQ launches new Portfolio Risk solution delivering Real-Time Risk Analysis for Multi-Asset Class Portfolios


S&P Capital IQ launches new Portfolio Risk solution delivering Real-Time Risk Analysis for Multi-Asset Class Portfolios

http://www.bobsguide.com/guide/news/2013/Jun/17/sp-capital-iq-launches-new-portfolio-risk-solution-delivering-real-time-risk-analysis-for-multi-asset-class-portfolios.html

Solution incorporates leading risk and scenario analytics with essential market data and fundamentals to produce a one-of-a-kind offering

S&P Capital IQ today announced the launch of its Portfolio Risk solution, an advanced risk and scenario analytics tool that provides traders, portfolio and risk managers with the ability to make decisions about the pricing, hedging and capital management of multi-asset class portfolios in real-time.

Available on the S&P Capital IQ desktop, the product brings together leading risk and portfolio analytics acquired through last year’s purchase of R(2) Financial Technologies and S&P Capital IQ’s extensive market and reference data. The Portfolio Risk solution offers a fully integrated data and analytics platform, eliminating the need to invest in separate data to run risk systems. In addition, it gives users the ability to use interactive portfolio dashboards to aggregate data or drill down to the most detailed level of fundamental financials and research, enhancing understanding of impacts of potential changes on P&L at an actionable level. These views are comprehensive, yet easy to change and organized to suit individual needs.

The Portfolio Risk solution covers a diverse range of asset classes from cash, fixed income and equities to exotic derivatives. By offering best-in-class instrument pricing, portfolio analytics, scenario analysis and stress-testing capabilities via shareable dashboards, it facilitates communication and collaboration around risk and investment strategies while also providing full transparency into underlying methodologies and on-the-fly calculations. These features ensure that risk metrics can be calculated quickly and that new scenarios or market strategies can be tested and acted upon swiftly.

“In just over a year since our acquisition of R(2) Financial Technologies, we have successfully brought together rich data, sophisticated analytics, and relevant market commentary, news and analysis,” said Lou Eccleston, President, S&P Capital IQ. “The result is that our clients can quickly generate a transparent, fully customized risk picture enabling them to react quickly to changes in the market and to new investment ideas.”

“We are just beginning to leverage the depth of S&P Capital IQ’s data resources to deliver what we call ‘risk intelligence,’ including the power to gather new insights into how portfolios behave under varying scenarios,” said Dan Rosen, Managing Director, S&P Capital IQ. “We have assembled one of the most experienced teams of risk and financial engineering experts in the world and dedicated them to delivering interactive, real-time risk analysis as a central part of the investment decision making process.”

Meeting Multi-Asset Trading Challenges: Workable Approaches for Success in a Dynamic Capital Markets Arena – A white paper from Smarttrade


 

 

Meeting Multi-Asset Trading Challenges:

Workable Approaches for Success in a Dynamic Capital Markets Arena

a White Paper from

Meeting Multi-Asset Trading Challenges:

Workable Approaches for Success in a Dynamic Capital Markets Arena

2

Introduction

There has been widespread change in the global capital markets in the last few years, and it has had significant effects on banks’ trading platforms. Banks must provide trading platforms that can access the global financial markets, manage increasingly complex transactions involving multiple asset classes, and handle a range of protocols and market structures that are constantly evolving. Add to this the requirements to respond to evolving regulatory mandates, client demands for increased functionality and transparency, and increasing volumes and volatility; and it’s clear sell-side banks face a new, challenging trading terrain where they must quickly react to changing markets in order to remain competitive.

Institutional dealing is extending globally with more liquidity sources to manage, and involves more and more disparate counterparties. This creates the need to aggregate, create orders, and deal or trade faster with clear market views in a fast moving trading environment. The stakes are higher. Clients demand transparency and best execution even while trading larger volumes in more volatile markets across various market structures and across multiple asset classes.

Meeting Multi-Asset Trading Challenges: Workable Approaches for Success in a Dynamic Capital Markets Arena

3

 

Multi-Asset Trading Landscape

Siloed trading operations are becoming less and less optimal in this new environment. Clients want sell-side banks to support complex trades, often involving multiple legs in multiple asset classes. These trades may include instruments traded in more than one geographic region, in more than one time zone, and with multiple settlement arrangements. To compete in this kind of trading environment, sell-side banks need harmonized trading systems that enable deeper and richer cross-asset functionality.

In addition, they now need systems that can monitor risk more holistically and in real time across client accounts with diverse holdings. The pressure for sell-side banks to more transparently manage exposure across all business comes from both regulators and banks’ own risk management mandates, both of which continue to evolve.

Focus on Dealing Systems

Tier 1 and Tier 2 sell-side banks generally grow both organically and by acquisition. In the process of this growth, they build or acquire a plethora of trading systems that are disparate in terms of infrastructure, architecture and software. Some are legacy systems using old code bases and outdated hardware, some are purpose-built and best-of-breed, some are asset-class specific, and some handle multiple asset classes. A typical large global financial institution might have as many as 20, 50 or even 100’s of separate trading platforms. Many of these platforms may have open systems with flexible and scalable architectures, but others may be brittle, unable to scale, and difficult to modify to comply with a changing market environment. These platforms often operate independently of one another, requiring a spider’s web of interconnections and interfaces to enable connectivity with clients and interoperability with compliance, risk management, clearing, and other back office functions.

Evolving market structure, regulatory pressure, client demands, cost reduction, and consolidation are forcing many firms to consider a new paradigm for trading systems. They look for ways to harmonize their trading infrastructure across multiple asset classes; re-using functionality, data models, database, message transports, and protocols while still supporting the distinct workflows required by each asset class and market. There are a number of business benefits obtained from unification of platforms, technology and processes:

Meeting Multi-Asset Trading Challenges: Workable Approaches for Success in a Dynamic Capital Markets Arena

4

 

Rationalize operations across asset classes by removing silos, eliminating redundant infrastructure, 1. and dramatically reducing latency as well as the maintenance and support costs associated with siloed IT environments.

Standardize messaging to the back office, enabling a unified and normalized approach to allocations, 2. clearing, settlement, and reporting.

Meet customer needs for more complex trades involving multiple transactions across multiple 3. asset classes.

Provide buy-side customers with the ability to trade different asset classes in the same manner, 4. with similar algorithms, and from one point of connectivity.

Manage risk more holistically by providing complete, real time views of exposure across asset classes 5. and traditionally siloed systems.

Better prepare trading desks to meet evolving regulatory requirements without having to recode 6. multiple systems.

Provide customers and regulators with improved transparency into pricing, liquidity, transaction cost, 7. and risk.

Integrated, Multi-Asset Trading Systems

A single, integrated dealing system can deliver dramatic improvements in cost reduction, risk control, and profitability. So what components would need to be included in such a system?

It would have to include functionality for liquidity aggregation, pricing, order management, position-keeping, smart-order routing, and internalization. Such a system should be modular, allowing a firm to turn on features or asset classes one at a time to manage migration. It should also enable the firm to turn on or off specific functionality at discreet levels (for example, turning on a specific liquidity seeking algorithm for use with equities in the US markets, modifying it for use in the EU, and leaving it disabled for futures).

The core of this type of integrated system is a reliable, scalable, low latency, and high-throughput messaging capability. Scalability is crucial. Equities, options, and forex volumes have all been growing for years. As more of the products traditionally traded over the counter (OTC) are migrated to central clearing and electronic trading, volume in these assets is expected to swell dramatically. Systems used for trading these instruments will need to scale easily using industry-standard hardware.

Meeting Multi-Asset Trading Challenges: Workable Approaches for Success in a Dynamic Capital Markets Arena

5

 

An open architecture that facilitates easy integration with external systems is also crucial. Open application programming interfaces (APIs) can simplify and standardize integration, making the trading platform more flexible, and more customizable. These APIs should allow integration of applications to extend functionality, custom analytics and algorithms, specialized compliance and risk checks, and client-, market- or asset class-specific functionality.

Such a system would also need a standard set of adaptors to facilitate quick and flexible integration with counterparties for both liquidity and order inflows and pricing and execution outflows. It should have multiple deployment options: internally within the firm, hosted/colocated, distributed across multiple centers, with all corresponding monitoring tools depending on the option chosen.

A standardized data model needs to be flexible and robust enough to preserve all the nuances and unique identifiers present in each asset class while normalizing the data to enable common processes to handle liquidity aggregation, order book management, order routing, state management, etc.

Lastly standardized tools should be available for managing and monitoring connectivity, latency, and performance across counterparty connections, liquidity venues, back office connections, and internal processes.

Aggregating Liquidity

Banks need to easily identify, connect to, collect and aggregate prices or market data from a growing number of increasingly diverse liquidity sources. Market data comes in different formats and often in different protocols, depending on the source and instrument. These market data require normalization to effectively capture prices, apply analytics, and determine the best available prices for each instrument set up to trade. These capabilities must support both the most simple and the most complex versions of pricing, providing capabilities to capture and determine top of book for OTC and listed flow based on price, size, and spread.

Price Distribution

Approaches to price distribution can vary by asset class, by trading objectives, and by client. A multi-asset system needs the ability to customize pricing on a client-specific basis, applying risk analytics, credit checks, spread data, and trading limits based on customer-specific criteria.

Meeting Multi-Asset Trading Challenges: Workable Approaches for Success in a Dynamic Capital Markets Arena

6

 

In addition, the system must be flexible in the way it distributes prices. Some clients may wish to receive every price update streamed into high-frequency trading systems, while others may require only incremental snapshots of conflated data. Some clients may need conflation to preserve system resources or to support click-trading. Scalability and resilience are also critical, enabling the system to function smoothly during periods of extraordinarily high volume and volatility.

Order Management

Effective order capture, whether from internal or external sources, is another given in a high-speed, multi-asset trading environment. Standardized formats ensure orders are normalized in the trading book and properly managed, tracked and reported throughout their lifecycles. A critical feature of an order management component is the ability to track and monitor state throughout the order’s lifecycle. By standardizing the approach to order management across asset classes, firms can better track state and monitor complex, multi-leg orders involving multiple asset classes, each with multiple executions and fills.

In addition, a single, multi-asset platform gives traders and risk managers a holistic understanding of client positions, outstanding orders, and buying power across all their trading activity to better manage pre-trade risk in real-time. By aggregating all the order flow and positions for all asset classes together, firms can also get a real-time view of P&L dynamically and apply analytics as needed to ensure the highest level of risk management while pursuing best execution.

Internalization and Matching

To internalize or cross orders for best execution and maximum advantage to the bank also requires advanced tools that route to match orders within trading books. Normalized data model technology ensures parallel buys and sells in the trading book execute and move to trade reporting. A matching engine should be flexible, accepting and matching internalized orders based on pre-set rules implemented by asset type, security being traded, and by region to accommodate varying market structure and regulatory demands.

With increased volume and the technological means to pre-evaluate orders, sell-side banks can establish their own dark pools for trading in different instruments. The ability to show or not show the trade – based on pre-set rules – will need to be an integral part of order management with the continuing development of these internalized markets.

Meeting Multi-Asset Trading Challenges: Workable Approaches for Success in a Dynamic Capital Markets Arena

7

 

Smart Order Routing

Dynamic trading environments require sophisticated smart-order routing capabilities, and multi-asset trading systems demand even more sophistication. The system must be able to route orders for execution, separating multi-leg trades for routing to different execution points. The system should support execution algos to ensure best execution. A router should also manage the life cycles of orders, reconciling “child” orders to parent orders for reporting, allocations, settlement, and for proving best execution. The router should have access to the current top of book and depth information from the liquidity aggregator to manage best execution strategies.

Tracking the state of an order – monitoring the level of fills versus open orders, knowing where the child orders are and the state of those open orders, and knowing the status of internal and external markets enables cross-asset trading desks to dynamically manage trading activity. Along with the order’s state, current views of market price/volume activity, internalized or crossing trade books, and rules, such as credit tolerance and client preferences, further enable dynamic management of orders to ensure best execution.

Messaging Layer Real-time Multi-asset Trading Environment (Pre-Execution) Normalization to a Standard Data Model Price and Order Aggregation Smart Order Routing Business Rules/Algos Crosses Internalization Liquidity Sources Other OTC Fixed Income Futures Equities FX Other OTC Fixed Income Futures Equities FX

Order Entries Credit/Pricing Rules Price Distribution

 

R

eal-time Multi-asset Trading Environment (Pre-Execution)Meeting Multi-Asset Trading Challenges: Workable Approaches for Success in a Dynamic Capital Markets Arena 8

The Importance of Post-Trade

Rapidly increasing volumes across asset classes like equities, options, futures, and FX create challenges because most legacy post-trade processing systems have difficulty keeping up during spikes in activity. Automation of post-trade operations is growing in importance and in complexity as firms work to consolidate their trading activity in multiple assets that clear and settle in multiple markets, across different time horizons, and with different settlement arrangements.

Systems that enable post trade convergence, providing all the messages related to order handling and executions in a standardized data model, with infrastructure capable of handling sharp volume spikes, can simplify post-trade challenges and therefore streamline post-trade operations.

A standardized approach can also help optimize risk management by enabling real-time clearance and settlement reporting. By processing in real time, firms gain global, real-time views of actual positions and exposure. This provides them with a better grasp of client opportunity and risk in a demandingly dynamic trading environment.

This approach also adds flexibility to respond to market structure changes. When, for example, interest rate swap trading becomes centralized, volumes are likely to grow exponentially. Sell-side banks with established operations in a multi-asset trading environment will be better prepared to quickly scale to meet this new demand. Accommodating new volume will impact everything from the trading desk operations to clearing and settlement.

A standardized data model ensures that post-trade reporting is uniform and universally accessible firm-wide. This way, all the post-trade systems for confirmations, allocations, settlement, the accounting systems, post-trade risk management and regulatory reporting systems can be updated in real time as trades complete. Real-time Multi-asset Trading Environment (Post-Execution)

Exchange OTC Dark Pool Profit & Loss Clearing & Settlement Messaging Layer Data Model Execution Reporting Consolidated Book

R

eal-time Multi-asset Trading Environment (Post-Execution)Meeting Multi-Asset Trading Challenges: Workable Approaches for Success in a Dynamic Capital Markets Arena 9

Conclusion

We operate today in a global trading environment that is significantly different from just a few years ago. Volumes are growing rapidly in every asset class, complexity is increasing as clients demand abilities to effect multi-leg trades in a variety of instruments. Asset classes are more correlated than ever, creating needs to effectively manage complex trading workflows to achieve best execution and effectively hedge. Successful trading in this environment requires not only algorithms and speed, but integrated tools to provide order life cycle intelligence for risk, position and asset management, always with an eye toward firm-wide impact.

Solutions must work in open architectures to enable integration across trading functions with multiple applications while remaining flexible and responsive to client and internal trading needs based on business demand and anticipated regulatory mandates.

Business demands from buy-side clients will be driving these processes, even while sell-side banks face resource pressures from regulatory changes, consolidation and cost-cutting. Clients will continue to look to the sell-side to handle more complex trades and provide tools to facilitate their trading and trade reporting. At the same time, the need to effectively manage exposure and risk across all client business also requires effective real-time tools. Implementing a standardized, multiple-asset trading platform that unifies all this trading activity and workflow can create an opportunity for firms to service a client’s entire book of business, enhance execution quality, improve risk management, and reduce infrastructure and support costs.

About smartTrade Technologies

Founded in 1999 by former IT and trading professionals from Citigroup, Credit Agricole and Société Générale, smartTrade provides the industry’s most sophisticated Liquidity Management System (LMS) to banks, broker-dealers, ECNs, asset managers and large hedge funds. Cross asset by design, smartTrade’s LMS platform performs best execution as defined by both the market and your firm.

For more information, visit http://www.smart-trade.net.

© 2012 smartTrade Technologies | http://www.smart-trade.net

CameronTec’s FIX Catalys Muscles in on Central and Eastern Europe


CameronTec’s FIX Catalys Muscles in on Central and Eastern Europe

http://www.bobsguide.com/guide/news/2013/Jun/19/camerontecs-catalys-muscles-in-on-central-and-eastern-europe.html

CameronTec providing CEE Stock Exchange Group with connectivity technology and trading infrastructure to manage and support the entire trading lifecycle.

CameronTec, the global standard in connectivity technology and trading infrastructure today announced that CEE Stock Exchange Group (CEESEG) has selected the Catalys line of products.

The Vienna Stock Exchange established the central execution interface (CEESEG FIX) for the four CEESEG members (Vienna, Budapest, Ljubljana and Prague). It also acts as market data hub for the six “cooperation” exchanges of Banja Luka, Belgrade, Bucharest, Macedonia, Sarajevo and Montenegro, and a further three energy exchanges in Eastern Europe.

CameronTec’s Catalys infrastructure will provide the CEESEG with an open-standard-based and centrally managed platform to truly harness performance, data interoperability, and business insight. This five year agreement includes CatalysTrade Front Ends, Market Data Layer and EnBS / ETS Adapters which will enable the exchange to seamlessly monitor, manage and control the entire order and trade flow as well as the market data flow from all respective venues. Catalys is underpinned by CameronTec’s market-leading connectivity technology, and engineered on the widely acknowledged standard in FIX engines, CameronFIX.

“CameronTec looks forward to further expanding its valued partnership with CEESEG for the long-term to provide state of the art FIX connectivity and trading infrastructure for what is undoubtedly the largest exchange operator in the region. We look forward to working with Wiener Börse to bring the broader benefits of Catalys to all members of the CEE Stock Exchange Group,” comments Anders Henriksson, CEO for CameronTec.

Catalys is designed to further empower brokers, banks and the buy-side to aggregate, view and manage related trade data. FIX transactional data and also latency, risk and operational data, all from a multitude of disparate third party systems, gateways and applications. Earlier in 2013 CameronTec announced latest technology enhancements included in Catalys v2.1, designed to further expand the Catalys offering and addressing critical areas of the deal life-cycle – pre-trade, trade and post trade, for a complete, modular FIX infrastructure platform built to address multi-asset, multi-market trading.

Raptor Trading connects to TMX Atrium community in North America


TMX Atrium™, provider of smarter infrastructure solutions for the financial community, today announced that Raptor Trading Inc., (Raptor) has connected to TMX Atrium in Toronto to take advantage of low latency access to Canadian exchange market data.

via Pocket http://www.bobsguide.com//guide/news/2013/Jun/17/raptor-trading-connects-to-tmx-atrium-community-in-north-america.html June 17, 2013 at 01:49PM

Phatra implements Charles River IMS for multi-asset Thai investment


Thailand’s Phatra Securities Public Company has implemented the Charles River Investment Management Solution (IMS) Version 9 to automate its domestic fixed income, equity and money market operations.

via Pocket http://www.theasset.com/article.php?news=TA&id=24120 April 26, 2013 at 01:33PM

Saxo Capital Markets enhanced offering includes new pricing structure


http://www.automatedtrader.net/news/automated-trading-news/142489/saxo-capital-markets-enhanced-offering-includes-new-pricing–structure

First Published Monday, 15th April 2013 from Automated Trader : Automated Trading News

Target spreads for all FX spot pairs to be reduced, intended to be particularly attractive on EURUSD.

Saxo Capital Markets UK, the multi-asset online trading and investment specialist, has enhanced its offering witht the launch of a new pricing structure.

The new pricing structure will mean that the target spreads for all FX spot pairs will be reduced. Some of the key crosses that will see lower target spreads are:

  • EURUSD 2.0 to 1.5
  • USDJPY 2.0 to 1.5
  • USDCAD 4.0 to 1.5
  • AUDUSD 3.0 to 1.6
  • EURJPY 3.5 to 1.9
  • GBPJPY 7.0 to 3.1

Torben Kaaber, CEO of Saxo Capital Markets UK comments: “Two-thirds of our clients trade three or more asset classes using their own specific choice of market access. Whether via FX spot, forwards, futures, contract options, ETFs or CFDs; Saxo Capital Markets offers the choice to trade most asset classes over-the-counter or on exchange.”

He continued: “Saxo’s platform combines a reliable and flexible way to hedge and trade in a multi-asset environment with global market coverage. Since FX is still a major component of clients’ portfolios, we decided to lower target spreads for all FX spot spreads, including EURUSD and USDJPY, in order to further increase the competitiveness of our platform.”

The new lower spread is intended to be particularly attractive on EURUSD, as John Hardy, Head of FX Strategy, Saxo Bank explains, “It is expected that we will eventually head back to the 2012 lows near 1.2000 and possibly even lower, as Europe either pulls together with the help of huge ECB involvement or moves back into crisis mode in the wake of the German elections in September.”

Torben Kaaber, CEO, Saxo Capital Markets UK

Torben Kaaber, CEO, Saxo Capital Markets UK

“Saxo’s platform combines a reliable and flexible way to hedge and trade in a multi-asset environment with global market coverage.”

Banks join forces to develop open standard for electronic OTC trading


Currently, enabling clients to trade with dealers on OTC electronic platforms is a manual process, requiring a significant amount of rekeying of data from internal dealer systems onto those of the venues.

via Pocket http://www.finextra.com/News/FullStory.aspx?newsitemid=24663 March 28, 2013 at 06:47PM

The challenges of a multi-asset world


http://www.finextra.com/Video/Video.aspx?videoid=348

Carl Weir, co-chair of the FPL Global Cross Asset Committee discusses the realities of a multi-asset trading floor

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