Buy-side Perspectives Issue 4 - Page 5

The road to a brighter future ?

We live in a world where having the right data at your fingertips is more important than ever . As software continues to become ever more sophisticated , it becomes possible to analyse the world in ways that were once in the realm of science fiction . The challenge on the buy-side is to translate that potential into practical applications that can help the trading desk to outperform the competition . In this issue , Yann Couellan , head of fixed income trading France at AXA Investment Managers , talks about the ways in which tools that bring together data analysis both pre- and post-trade can help the trader make better trading decisions ; meanwhile , Kent Rossiter , head of trading Asia at Allianz Global Investors , shares his insights on the ways in which trading desks around the globe are facing the challenges of handling multiple asset classes , finding liquidity in uncertain times , and facing the obstacles and changes posed by global regulation .

This month also sees the summer solstice , the time of the year when the sun is in the sky for the longest number of hours . It is fitting , then , that this issue also shines a light on some of the regulatory changes that are taking place as European regulators seek to spell out in ever-greater detail the shape of markets in equities , fixed income and FX derivatives as part of the upcoming MiFID II legislation . In the news section of this issue , you can find a brief update on ESMA ’ s progress towards implementing the European Commission ’ s ambitious goals . Of course , regulatory changes are not just a European concern . The first quarter has seen significant developments in Asia as well , most notably in Hong Kong , where the authorities have been investigating the possibilities for the introduction of an investor ID scheme that may potentially identify the end-investor for each transaction . At time of going to press , the final details have yet to be resolved , but the development looks set to be one to watch in the near future . Meanwhile in Japan , the country ’ s FSA has been investigating dark pools and high-frequency trading – a reminder that while sophisticated technologies are becoming ever more ubiquitous , debate about their proper role and function and the balance with more traditional market elements remains as furious and unabated as ever . Over the last few weeks , further insights have been delivered through K & KGC ’ s ongoing surveys into electronic bond liquidity initiatives , block trading in equities , and FX trading technologies and organisation of the trading desk . Notably , those on the cutting edge of the buy-side are now using algorithmic tools in FX more than ever before , with dramatic impact on the way trading is planned and executed . While sophisticated electronic execution in FX may be a minority activity today , it might just be the future . To find out more , turn to our section summaries for each asset class . In keeping with the uplifting spirit of this month ’ s issue , this month also sees the 233rd anniversary of mankind ’ s first ever recorded flight – on 5 June 1783 , the French brothers Mongolfier conquered the sky with the world ’ s first hot air balloon , which ascended to an altitude of around 2,000 metres . A timely reminder , then , that technological progress has long been a part of the human condition . As the economist John Maynard Keynes wrote in 1976 , “ ideas shape the course of history ”. Whether it is the increasing proportion of algorithmically traded orders in the market , the increased sophistication of TCA and market data tools , or the latest data-driven analysis models that allow the buy-side to make the best choice when selecting a counterparty , or even the venue that the trade takes place upon , we can be certain that further changes and discoveries lie ahead . We hope you enjoy this issue , and look forward to seeing you in our upcoming debates in London on 8th June , Boston and New York on 14 & 16 June , Germany on 20th September , Paris on 22nd September and throughout the rest of the year .
Elliott Holley Head of Global Buy-side Research
eholley @ kandkgc . com + 44 ( 0 ) 7759 476779
June 2016 www . buysideintel . com
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The road to a brighter future? W e live in a world where having the right data at your fingertips is more important than ever. As software continues to become ever more sophisticated, it becomes possible to analyse the world in ways that were once in the realm of science fiction. The challenge on the buy-side is to translate that potential into practical applications that can help the trading desk to outperform the competition. In this issue, Yann Couellan, head of fixed income trading France at AXA Investment Managers, talks about the ways in which tools that bring together data analysis both pre- and post-trade can help the trader make better trading decisions; meanwhile, Kent Rossiter, head of trading Asia at Allianz Global Investors, shares his insights on the ways in which trading desks around the globe are facing the challenges of handling multiple asset classes, finding liquidity in uncertain times, and facing the obstacles and changes posed by global regulation. This month also sees the summer solstice, the time of the year when the sun is in the sky for the longest number of hours. It is fitting, then, that this issue also shines a light on some of the regulatory changes that are taking place as European regulators seek to spell out in ever-greater detail the shape of markets in equities, fixed income and FX derivatives as part of the upcoming MiFID II legislation. In the news section of this issue, you can find a brief update on ESMA’s progress towards implementing the European Commission’s ambitious goals. Of course, regulatory changes are not just a European concern. The first quarter has seen significant developments in Asia as well, most notably in Hong Kong, where the authorities have been investigating the possibilities for the introduction of an investor ID scheme that may potentially identify the end-investor for each transaction. At time of going to press, the final details have yet to be resolved, but the development looks set to be one to watch in the near future. Meanwhile in Japan, the June 2016 country’s FSA has been investigating dark pools and high-frequency trading – a reminder that while sophisticated technologies are becoming ever more ubiquitous, debate about their proper role and function and the balance with more traditional market elements remains as furious and unabated as ever. Over the last few weeks, further insights have been delivered through K&KGC’s ongoing surveys into electronic bond liquidity initiatives, block trading in equities, and FX trading technologies and organisation of the trading desk. Notably, those on the cutting edge of the buy-side are now using algorithmic tools in FX more than ever before, with dramatic impact on the way trading is planned and executed. While sophisticated electronic execution in FX may be a minority activity today, it might just be the future. To find out more, turn to our section summaries for each asset class. In keeping with the uplifting spi ]و\›[۝8&\\YK\[۝[Y\H ܙ[]\\HوX[[8&\\]\XܙYY8$ۈ H[H M H[\“[ۙY\ۜ]Y\YHH]Hܛ8&\™\Z\[ۋX\[Y[[]YHو\[ Y]\ˈH[Y[B[Z[\[]XX[ܙ\š\ۙY[H\وH[X[ۙ][ۋ\HXۛZ\X^[\^[\ܛB[ NM͋8'YX\\HH\Hو\ܞx'K]\]\H[ܙX\[ܝ[ۈق[ܚ]ZX[HYYܙ\[HX\] B[ܙX\Y\X][ۈوH[X\]]H܈H]\]KY][[[\\›[[][H^K\YHXZHB\XH[[X[H[\\K܈][H[YH]HYHZ\XB\ۋH[H\Z[]\\[\˜[\ݙ\Y\YHZXY HH[H[H\\YK[ܝ\YZ[[H[\\Z[X]\[ۙۈۈ[Kۈ[][ܚۂM M[K\X[Hۈ \[X\\\ۈ \[X\[Y]B\وHYX\˘^\YZ[[ B[[^BXYوؘ[^K\YH\X\Z^P[˘B MNH ͍BB