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The Trading Mesh

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2016 Regtech Reflections & Five Predictions for 2017

December 21, 2016 by AQMetrics   Comments (0)           

With 2016 fading fast into the rearview mirror, we’ve taken a close look at the key regulatory and technology trends from the past year and put together our thoughts on what’s to come in 2017. With regulation constantly changing around the globe, financial professionals would be remiss not to reflect on 2016 themes and consider important milestones for the next year.
2016 Lessons – Culture & Conduct Failures… and All Those Fines
This past year, significant fines...

Event-Driven Trading Delivers Alpha. (Remember Alpha?)

December 16, 2016 by Wall Street Horizon   Comments (0)           

Corporate event data contains important signals that can generate alpha for the firms that have access to the data and know what to look for – whether they favor a fundamental, technical, or quantitative approach.
There is a view among some traders and investors that corporate event data falls in the realm of fundamental investment strategy, not the technical or quantitative investment approach. However, corporate event data has grown in importance and has evolved, as have the ways...

Voice trading compliance - the way it should be

December 2, 2016 by Gavin Davies   Comments (0)           

Despite the massive growth we have seen in electronic trading over the last twenty years or so, many traders - particularly those covering asset classes other than equities, or trading any kind of structured, non-standard instruments - still rely heavily on voice-based communication. Participants in these markets still need to talk to each other, and that requirement is not going to go away any time soon. 

This continued reliance on voice presents a number of regulatory challenges,...

Getting Better at Best Execution

November 29, 2016 by Trade Informatics   Comments (0)           

By Allan Goldstein
 
The principles of best execution should be fundamental to buy-side traders. After all, making sure that every trading decision achieves the best possible result for the investor seems like common sense. But while the spirit of best-ex might be ingrained in the industry, there has been a wide diversity of approaches to achieving and evidencing best execution in the past.  Additionally, the sell side has historically focused on delivering best-ex to clients, but...

Bridging the Abyss between Regulation and Action

November 28, 2016 by Bips Global   Comments (0)           

This blog was originally published at the Bips Global website and is reproduced here with permission
 
By Lene Hansen
 
Far too many regulations fall into that dark distorting gulf that exists between the regulator and the practitioner who is - hopefully - trying to comply with or enforce them.  (It should be noted that this is not a new phenomenon, in fact some might argue that the Bible itself is a good example of this problem).
Within the finance industry though...

Pre-earnings Announcement Strategies

November 22, 2016 by Wall Street Horizon   Comments (0)           

Article originally posted on Quantitative Trading blog by Dr. Ernest P. ChanMuch has been written about the Post-Earnings Announcement Drift (PEAD) strategy (see, for example, my book), but less was written about pre-earnings announcement strategies. That changed recently with the publication of two papers. Just as with PEAD, these pre-announcement strategies do not make use of any actual earnings numbers or even estimates. They are based entirely on announcement...

Winter is coming and it is called MiFID II

November 9, 2016 by Lene Hansen   Comments (0)           

I think that you’ll agree that it’s all very frustrating. Most of us believe in thoughtful cost-analysis and considered efficiency drives over uneducated broad-brush cost cutting and working like a dog to drive profits. But the market consistently plumps for the latter. Companies fall again and again into the trap of using an axe to hack off a limb (so that the other limbs must work harder) rather than utilising a scalpel to thoughtfully remove the dead flesh and leave the limb...

Could Open Networks Create More Efficient Markets?

November 7, 2016 by Dr Paul Lynch   Comments (0)           

This article was original published on the itarle website, and is reproduced here with permissionOver the last few years, there has been much debate on the subject of Net Neutrality, the idea that all Internet traffic should be treated equally, regardless of its content or ownership. It is a hotly argued topic, with proponents lobbying hard on both sides.
Supporters of Net Neutrality cite the benefits of open standards, transparency, low barriers to entry for innovators and equal...

Technology Can’t Fully Replace Human Judgement and Intuition

November 7, 2016 by Wall Street Horizon   Comments (0)           

by Bruce Fador, Wall Street HorizonTechnology now comprises a big part of today’s trading landscape, perhaps most of it. Beyond just automating what used be to manual tasks, technology has encroached well into the “thinking” parts of a trader’s job.
The key question for firms is where to draw the line. How much of the human touch should they outsource to machines?
It’s a tough call because technology delivers many advantages. With automated trading systems, for...

MiFIDII Culture and Conduct – Consistency and Control

November 7, 2016 by AQMetrics   Comments (0)           

By Claire Savage, COO, AQMetrics
In light of the recent global financial crisis, and with MiFIDII fast approaching, the UK’s Financial Conduct Authority (FCA) along with other regulators in Europe, has been placing an increasing emphasis on culture and conduct. A number of FCA publications – including a dedicated Thematic Review – as well as recent speeches from the Bank of England[1], have referred specifically to why having the right culture and conduct is...