Bond trading increasingly moves digital

Banks look to unconventional economic indicators | Banks outline strategies for return to office | FICC algo trading good-practice guidelines issued

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June 25, 2020

SIFMA SmartBrief Operations &amp; Technology

News on the capital markets for operations and technology professionals

Top Story

Bond trading increasingly moves digital

Volatility caused by the coronavirus pandemic is pushing bond traders to increasingly adopt electronic trading, especially for large orders. Although many stress that voice trades will continue to be part of market-making, electronic bond-trading platforms are seeing record volumes. See the Electronic Trading Primer from SIFMA Insights.

Full Story: Reuters (6/22)

Operations Update

Banks look to unconventional economic indicators

Banks are looking beyond tried and tested indicators to gauge the economy's health and future course. Footfall through airports and retailers, restaurant reservations and drivers' requests for map directions are among alternative indicators considered.

Full Story: The Wall Street Journal (tiered subscription model) (6/21), Reuters (6/22)

Banks outline strategies for return to office

Bank executives are giving details of strategies for ensuring safety and continuity as some staffers begin returning to the office. SIFMA recently published considerations for the industry.

Full Story: Financial Times (subscription required) (6/23)

FICC algo trading good-practice guidelines issued

The FICC Market Standards Board has issued good-practice guidelines for algorithmic trading in fixed-income, currency and commodity markets to reduce risk and promote good conduct and governance among traders. The board's statement lists 10 points market participants and venue operators should follow.

Full Story: The Trade (UK) (6/24)

Exchange execs discuss how staff will return to office

Top executives from several major exchange groups discussed how they will go about returning remote staff to the office at an industry webinar. "We've been really happy with our ability to work from home across all of our regions so we're not in a huge hurry to get people back in but we are aware that some people are in a hurry so we are trying to find the right balance," said CME Group COO Julie Holzrichter.

Full Story: Futures & Options World (subscription required) (6/24)

Citadel rides retail trading wave
Financial Times (subscription required) (6/21)

Retail trading surge extends to options market
The Wall Street Journal (tiered subscription model) (6/24)

	The SIFMA Podcast: Listen to the latest episode SIFMA's podcast brings together market and industry experts to make the connection between public policy and finance.

Technology Update

Tech firms move into wealth management

Major tech names are developing infrastructure that will enable them to enter the wealth-management business, according to a Boston Consulting Group report, which says they will provide formidable competition.

Full Story: Financial Times (subscription required) (6/23)

Credit Suisse acquires stake in Brazilian digi broker

Credit Suisse has agreed a deal that could see it eventually taking a stake of up to 35% in Brazilian digital broker modalmais, which currently has $1.9 billion of assets under custody. "This transaction further enhances our ability to serve our clients digitally while getting access to additional client segments in a fast growing environment," said Credit Suisse's Philipp Wehle.

Full Story: Reuters (6/23)

Commentary: Market infrastructure's future is in the cloud

The need for the financial industry to work remotely through the coronavirus pandemic has underscored the benefits of moving market infrastructure to the cloud, write Nasdaq's Brad Peterson and Lars Ottersgard. "Shifting on-premises operations to the cloud will allow us to leverage evolving industry trends, launch new offerings quickly, improve service, as well as manage costs, risks, and unexpected volume spikes," they write.

Full Story: Fortune (tiered subscription model) (6/22)

Citi automates FX trading platform execution
The Trade (UK) (6/18)

MayStreet's expansion gains $21M funding support
WatersTechnology (subscription required) (6/18)

Regulatory and Legislative Update

CFTC reportedly aims to revamp HFT rules

The Commodity Futures Trading Commission will propose rules as early as next week for exchanges to use in overseeing high-frequency trading, sources say. The CFTC reportedly will also drop a plan to obtain access to traders' computer codes and to force high-frequency traders to register with the agency.

Full Story: BNN Bloomberg (Canada) (6/18)

SEC, DOJ to jointly investigate exchanges' data fees

The Securities and Exchange Commission and the Justice Department will conduct a joint inquiry on whether fees for market data charged by exchanges are subject to competition. "Competition offers numerous consumer benefits regardless of the underlying market," Assistant Attorney General Makan Delrahim said at an event alongside SEC Chairman Jay Clayton. "A regulatory scheme that omits competition considerations is likely to leave, as they say, money on the table, and consumers disadvantaged." SIFMA has stated its support for the review.

Full Story: The Wall Street Journal (tiered subscription model) (6/22)

Commentary: Regulators need new approach to fintech

The digitization of financial services is forcing regulators to consider their approach to overseeing this emerging sector, writes Accenture's Oliver Reppel. Managing data will be key to keeping regulations relevant, he writes, as will automated reporting and closer cooperation between regulators and financial services firms.

Full Story: Accenture (6/22)

SIFMA News

Join SIFMA on Wednesday, Sept. 16, for the third webinar in the Ops Series. The transition to alternative reference rates may come as soon as the end of 2021. Firms need to be able to adapt to instruments using new rates, such as SOFR, implement fallbacks, and review and execute new agreements. This webinar will discuss how ops professionals should prepare. Register today!

Podcast: Searching for the "New Normal" — A Business Continuity Planning Update

In the face of a global pandemic, the financial industry has relied upon its robust business continuity planning efforts. Kenneth E. Bentsen, Jr., SIFMA president and CEO, sat down with Ron Lefferts, global leader of technology consulting at Protiviti, and Tom Price, managing director and head of SIFMA's technology, operations and business continuity team, to explore the story behind the industry's business continuity planning efforts in the face of a global pandemic.