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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.

The marketplace is whirring with great minds turning their attention to what the latest ESMA rules for MiFID II actually mean. We’re not sure anyone has completely figured that out yet, but we’ll be watching closely as we’re embroiled in a number of projects that are impacted to various degrees by the latest ESMA utterances, which emerged earlier this week.

We enjoyed an electric session this week with Bloomberg on what we used to call machine-readable news. Along with our own excellent webinar on Big Data last week – where we heard from, among others, Thomson Reuters Starmine’s Adam Baron on event-driven research – the seminar at Liverpool Street’s Andaz Studio offered some fascinating insight on how ‘news’ has been transformed to feed quantitative models for trading.

Big Data is taking off in financial services markets as firms begin to pull together structured and unstructured data, and implement enterprise and risk apps dedicated to issues including finding alpha, managing conduct risk and analysing market sentiment.