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Low Latency Blogs

Sarah Underwood

Calypso Technology has extended its trading and collateral optimisation platform with the integration of real-time portfolio and risk management functionality. The integration aims to support growing numbers of investment managers trading both derivatives and cash securities.

Dan Barnes

Demanding regulation is transforming order and execution management systems into detail-driven trading engines

The capacity of order management systems (OMSs) to support buy-side desks was challenged at the Barcelona-based Fixed Income Leaders Summit 2015 on 14 October by John Greenan, a front office systems specialist, who suggested that some providers “had not kept pace” with the needs of traders as highlighted by a weak support for fixed income trading. Stephen Grady, head of Global Trading at Legal & General Investment Management said that Greenan’s comments were an “accurate reflection”, and said “Analysing trading, or who we are trading with and how they traded in the past; those are the gaps. In order to evolve the trading desk that is the sort of functionality we are looking for. I think the OMS space has left that field open to other vendors for whatever reason.”

Dan Barnes

How do you strike a balance between providing transparency into smart order routing so that buy-side firms can understand how their orders are routed and can meet their best execution obligations, whilst protecting the intellectual property of the sell side firms providing order routing services? That’s a question that traders, asset managers and smart order router vendors are currently grappling with.

Our own sentiment analysis here at Intelligent Trading Technology is that sentiment analysis’ star is rising. A few weeks back, I chimed in on the progress this segment of our market has made as evidenced by the sophistication and enthusiasm on show by both presenters and audience members at a recent Bloomberg-hosted seminar on machine learning.

Hot on the heels of our highly successful Trade Europe Now! white paper (sponsored by Interxion and available for free download here), yesterday we released our latest missive on MiFID II. Titled ‘MiFID II: Practical Considerations for Gainful Compliance’, the paper is sponsored by ORC Group, and like it says on the tin it offers trading firms guidance for making the most of the changes the new regulation will bring.

By Zoe Schiff

If you thought MiFID II was a topic confined to the harried people of the EU, think again. Concerned New Yorkers packed a breakfast briefing earlier this month to hear how the far-reaching regulation will impact the European trading landscape – and open opportunities for US traders to broaden their horizons. They also enjoyed a Michelin Starred breakfast courtesy of the event’s hosts: USAM Group, Interxion, and Quincy Data.

Changes made to recommendations on time synchronisation in the European Securities and Markets Authority’s (ESMA) latest technical standards for MiFID II have been welcomed by Perseus, a provider of managed services including PrecisionSync time services, and recognised as being fair and reasonable. While previous ESMA recommendations suggested nanosecond clock synchronisation for electronic trading, the standards published late last month settle on 100 microseconds for electronic trading and 1 millisecond for voice trading.

Some of us were encouraged – relieved, even – to read on various non-value-added news ‘services’ (PR wires?) about the success of the Symphony trader messaging collaboration in securing financial support from Google Alphabet, the new incubator-type funding organisation supported by You Know Who.

Andrew Howieson

This is a contributed article from Andrew Howieson, an advisor to FactEntry.

Corporate bond markets are inherently illiquid

There is now wide recognition that corporate debt markets lack sufficient liquidity to meet investor trading requirements. Blackrock’s September 2014 paper Corporate Bond Market Structure: The Time for Reform is Now described the trading market structure as “broken”. The withdrawal of dealer capital, driven by Basel III and Dodd-Frank regulation (leading to a reduction in corporate bond inventory from $250 mm to $60 mm in 2014) is broadly cited as the cause of dwindling liquidity. Market followers with longer memories may recall that buy-side concern over market liquidity and transaction costs pre-dates Basel III and was the driver of a generally brief but extensive flourishing of electronic trading “solutions” around 2000. It is not unreasonable to suggest the corporate bond markets are inherently illiquid and were only made partially and temporarily liquid through the application of dealer capital, at a price.