Facing regulatory changes and increased expenses, banks are starting to team up on technology projects to spread the burden. "Banks are looking to build things in a way that can be reused, and there is a collective interest in developing applications collaboratively," said Kosta Peric, head of innovation at the Society for Worldwide Interbank Financial Telecommunication. Register today for SIFMA's Financial Services Technology Leaders Forum and Expo, June 19-21.
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Andrew Haldane, executive director for financial stability at the Bank of England, said a global system for identifying market participants on every transaction would improve market security. Haldane's comments support efforts by Group of 20 leaders, who are scheduled to meet in June in Mexico to proceed with a legal-entity identifier system. Financial industry participants also are working to implement a system. "The industry will benefit from improved risk management, including a more holistic view of counterparty exposure, as well as operational benefits," said SIFMA Managing Director David Strongin.
The Securities and Exchange Commission has given Depository Trust & Clearing permission to operate a clearinghouse for mortgage-backed bonds. The DTCC offers similar services for government-related securities, including Treasurys. Michael Bodson, chief operating officer of DTCC, will be a featured speaker at the SIFMA Operations Conference and Exhibit register today.
Financial services firms are confronted with global market uncertainty as well as regulatory changes, but they also face an ever changing landscape in terms of technology. The traditional models for managing technology and related economics have morphed since the global financial crisis began several years ago. Firms must deal with four major forces, including an increased demand for technology and more pressure to ramp up IT spending.
The buy side has a number of services available to facilitate the posting of collateral on over-the-counter derivatives trades. However, Nomura is warning that sovereign-debt downgrades present challenges to central counterparties' risk-management capabilities. "The skill set required to manage those risks isn't typically found in the treasury functions of a CCP," said Michelle Neal of Nomura.
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Brokers are updating their compliance and technology systems to meet regulations mandated by the Dodd-Frank Act, but institutional investors are largely unprepared for the new rules, according to a study. Rule Financial's report indicates that buy-side firms expect the rules to increase their trading costs, but they have done little to prepare because of confusion about the rules and the time frame for implementing them.
Newedge is continuing to roll out its in-house, low-latency smart order-router platform. The firm launched phase 1 of the effort in the third quarter of last year and has now introduced phase 2. "This platform scans a large, diverse amount of data and then determines the optimal destination for every order," said Jack Boyle of Newedge. "The SOR considers price, depth of quote, historical liquidity, fill rates, latency and price discovery, among other factors, and routes the order to the venue of least cost, providing clients with the best price."
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The Foreign Account Tax Compliance Act is scheduled to take effect this year. FATCA is prompting financial advisers to delve more deeply into the offshore holdings and foreign bank accounts of their clients. "If you have any client with a hint of a foreign connection, proceed with great caution," said Leigh-Alexandra Basha of Holland & Knight. Learn more about FATCA.
Officials from the Group of 20 nations agreed in 2009 to require all standardized over-the-counter derivatives transactions to be processed through a central counterparty. Also, the trades should go through an electronic trading platform or exchange when possible, and all derivatives transactions must then be reported to a trade repository. However, industry participants are not sure who is responsible for reporting the trades, Joe Rennison writes.
SIFMA's 39th Annual Operations Conference + Exhibit convenes senior professionals from across the financial services industry and is a must-attend event. Featured speakers include industry veterans Bill Rutledge, formerly EVP
for Bank Supervision at the Federal Reserve, and Rick Bookstaber, author of "A Demon of Our Own Design." They will join a full slate of regulatory and infrastructure leaders -- SEC, FINRA, CFTC, MSRB, DTCC, FICC, OCC -- to deliver key expert insights into infrastructure, risk management and regulatory changes affecting your business. Register today.
SIFMA's Financial Services Technology Leaders Forum and Expo, "Managing Today's Realities" is the industry's premier financial services event. Join us as we explore top industry trends, and hear senior-thought leaders discuss the importance of driving revenue growth, responding to regulatory demands while simultaneously managing costs. Program topics include Cybersecurity, Derivatives Trading, Cloud Computing, Program Management, Privacy and Information Security, Social Media, Big Data & Data Analysis, and much more. This is a must-attend event for senior-level technology and operations, legal and regulatory, compliance, risk, trading and strategic development professionals. Register today.
Come see NY Giant Super Bowl Quarterback Eli Manning at this year's SIFMA Financial Services Technology Expo Hall. Eli Manning will be appearing in our Expo Hall during our closing Expo Hall Reception on June 20. Attendees will hear about the Giants' road to the Super Bowl, have the opportunity to ask questions of this NY Giants superstar and also have the chance to win an autographed football by Eli Manning. SIFMA's Financial Services Technology Leaders Forum and Expo, "Managing
Today's Realities" is the industry's premier financial services event. Join us as we explore top industry
trends, and hear senior-thought leaders discuss the importance of driving revenue growth, responding
to regulatory demands while simultaneously managing costs. Register today for the SIFMA Financial
Services Technology Expo.