CFTC moves toward digital transformation | Cybersecurity suffers from analysis paralysis | Panelists discuss Know-Your-Customer programs
May 18, 2017
SIFMA SmartBrief Operations & Technology
News on the capital markets for operations and technology professionals
Top Story
CFTC moves toward digital transformation
The Commodity Futures Trading Commission has launched LabCFTC, a financial-technology initiative aimed at upgrading regulation of US markets in the digital age, as well as better engaging with the fintech sector without impeding innovation. "LabCFTC is intended to help us bridge the gap from where we are today to where we need to be: 21st-century regulation for today's digital markets," said acting CFTC Chairman J. Christopher Giancarlo.
Reuters (5/17),  CoinDesk (UK) (5/17),  Futures & Options World (subscription required) (5/17),  The Wall Street Journal (tiered subscription model) (5/17) 
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Operations Update
Cybersecurity suffers from analysis paralysis
A proliferation of research on cybersecurity has not stopped study of the issue, taking away resources from operations, cybersecurity adviser Melissa Hathaway says. Recommendations "have consistently called for the need for leadership, follow-through and operationalization of the policies," she said.
BankInfoSecurity (5/12) 
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Panelists discuss Know-Your-Customer programs
Panelists at SIFMA's recent Operations Conference in Boca Raton, Fla., discussed Know-Your-Customer programs, saying effective efforts are a top priority and a way to protect financial institutions against fraud.
Fund Operations (subscription required) (5/16) 
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JPMorgan purchases offices in Dublin
JPMorgan Chase is purchasing an office tower in Dublin that would be capable of accommodating around 1,000 staff. The company is preparing to move at least part of its business out of London after Brexit.
The Wall Street Journal (tiered subscription model) (5/15),  Futures & Options World (subscription required) (5/15) 
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Technology Update
Traders still trading despite rise of machines
Research by Greenwich Associates finds sales calls remain in demand for the buy side, meaning electronic trading has not displaced sales traders. "Even in US equity markets, often viewed as one of the most electronic markets in the world, high-touch trading, or single-stock trades routed to a sales trader, still represents the largest execution channel," said Richard Johnson of Greenwich Associates.
Bloomberg Professional Services (5/11) 
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Nasdaq debuts platform with data-based investment signals
The Nasdaq Analytics Hub is a platform for the buy side that analyzes central bank communications, event-based signals, social media, retail sentiment and technical factors to provide investment signals based on data. "We've implemented a rigorous process whereby we use machine intelligence to normalize, validate and back-test the data to ensure the resulting outputs translate into multiple real-life investment use cases," said Nasdaq's Terry Wade.
The Trade (UK) (5/16) 
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NYSE Group's "speed bump" gets green light from SEC
The Securities and Exchange Commission has given NYSE Group permission to introduce a "speed bump" on its NYSE MKT exchange, which it also plans to rename NYSE American. The innovation will add a fraction-of-a-second delay to outgoing and incoming orders, with the aim of making market conditions fairer for all participants.
Reuters (5/17),  The Wall Street Journal (tiered subscription model) (5/16),  Financial Times (tiered subscription model) (5/16) 
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Regulatory and Legislative Update
SEC issues cybersecurity alert to financial firms
The Securities and Exchange Commission has issued a cybersecurity alert emphasizing that broker-dealers and other financial-services professionals should conduct regular vulnerability scans and penetration tests of critical computer systems.
InvestmentNews (tiered subscription model) (5/17) 
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CFTC proposal could aid compliance chiefs
The Commodity Futures Trading Commission might modify rules to harmonize with the Securities and Exchange Commission, a move that could make life easier for chief compliance officers. "While there isn't too much to these particular proposed amendments, hopefully this represents an initial installment for the guidance from the CFTC which CCOs have long been waiting for," said Tim Selby of law firm Alston & Bird.
Bloomberg Professional Services (5/16) 
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CFTC's fintech advisor joins SIFMA's FinTech Conference program
Jeffrey Bandman, fintech advisor at the US Commodity Futures Trading Commission, joins the FinTech Conference program as the Day 1 keynote speaker. New developments in robo-advising, robotics, artificial intelligence, machine learning and blockchain experiments have the potential to reshape securities markets and processes. SIFMA's FinTech Conference, to be held on two half-days June 5-6 in New York City, will bring together innovators, industry leaders and regulators to discuss these developments and the impact on firms, their operations, and regulation. Register today!
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One doesn't discover new lands without consenting to lose sight of the shore for a very long time.
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