BUY-SIDE
TRADING
COMMUNITY
The only constant is change
by K&K GLOBAL CONSULTING
Business intelligence for the Buy side
- welcome to the
new decade!
Kristian Karppi, Managing Director of K&K Global Consulting
Trailblazing technology innovation
Within equities and FX, the counterparties are phasing
in new machine learning based trading technologies to
fine tune adaptability and minimise market impact. The
quality and access to data is the underlying factor behind
all intelligent solutions and natural language processing
(NLP) technologies are expected to enrich the data set
within this new decade taking informed decision taking to
new heights. The best part of our job is that now and then
we are approached by pioneers who are at the forefront,
proposing new types of technical solutions that automate
burdening laborious tasks. We love that these people
have the opportunity to take centre stage inspiring others
within the buy-side community to take trading to the next
level. Fixed income has undergone a transformation to
more electronic ‘communication methods’ during the last
years but to what extent has the human trader’s behaviour
and dependency on bank capital changed? Undoubtedly
there are more changes to come and more that needs to
be done.
A sliding regulatory landscape
As the dust is settling two years after the implementation
of MiFID II/MiFIR, the 8th annual private, exclusive,
invitation only Alpha Trader Forum Global Summit will
be the first opportunity for the buy-side to debate and
shape the upcoming “MiFID II refit” consultation. It will
be interesting to explore the reasons as to which are the
dysfunctional market themes that are triggering this refit?
How will the regulatory changes impact the ongoing
‘equivalence’ negotiations between the EU and the UK? Or
is ‘equivalence’ more about adhering to broader political
objectives. At which point will the authorities start trying
to identify and resolve the underlying issues as to why
European banks are underrepresented among the top
10 banks? If risk reduction and resilience are named as
key objectives – would it be reasonable for UK/European
politicians to start bolstering their domestic banking to
remain competitive in the global capital markets?
Winter/Spring 2020
There is an emphasis on cash equities
trading when it comes to regulatory
themes but there are a few very
important points that potentially will
have a MAJOR impact on the future of
fixed income and derivatives trading.
This is not the time for complacency.
The heads of trading must understand
the issues and lobby, either direct and/
or through their associations, to make sure
that the changes end up in their favour! For
example, let’s just keep our fingers crossed
that nobody will pursue the proposition for
market abuse regulation and transaction reporting for
FX Spot. You have a much better alternative by signing up
to the FX Global Code.
The Buy-side Trading Community operated by our firm
is very happy to assist as always – just reach out to us!
Improved liquidity formation and work life balance
I was recently reviewing my past buy-side head trader
salary benchmark research reports evaluating the
attractiveness for the future generation to aspire for buy-
side trading roles. I hope by the time of this publication
that you have responded to LSEG’s consultation about
the exchange open hours. This is an unprecedented
opportunity for you to make an impact on every cash
equity traders’ work life balance going forward. Alleviated
pressure on the cash equities traders will likely be a
positive impact on the working culture and other parts
of your firms. If the LSEG consultation agrees with the IA
and AFME proposals, they will need your assistance for
the other European exchanges to follow. The time to act is
now!
Thank you for the past 10 years of engagement – we
are looking forward to continue to assist the buy-side
trading community over the course of the new decade.
But we need your engagement to help us to help you.
www.buysideintel.com
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