What are the major changes affecting fixed income as an asset class ?
There are two major themes affecting fixed income as an asset class today . Firstly , an increased demand for pre-trade information and liquiditydiscovery tools , as firms endeavour to execute their business strategies more efficiently . Secondly , there is an operational challenge with demand to develop processes and systems as MiFID II comes into effect , competing with pressure on costs . With the latest
SIMON MAISEY , TRADEWEB
MiFID II ? Tradeweb ’ s got it covered …
An interview with managing director , global head of business development at Tradeweb , Simon Maisey .
phase-in proposals from ESMA , market participants need to ensure they have a solution that provides complete clarity and certainty at each stage of their conformance process . We can help , for example , where the pre-trade certainty check with clearing members , which is mandatory in the U . S . but still optional under EMIR , is already incorporated in the Tradeweb workflow . So that when it becomes a requirement under MiFIR and the implementation of the trading mandate , our clients will be fully prepared .
How can firms overcome the operational challenges as a result of MiFID II ?
To avoid operational uncertainty , the majority of our clients are already ahead of the curve when it comes to getting ready for the mandatory clearing of interest rate swaps . With operational processes riddled with so much complexity , it is easy to see why the market has moved early . At the end of the day , all clients want is to have some clarity around what they have to do now and in the future , instead of being left with grey areas in-between that create uncertainty . When executing their trades , Tradeweb has seen an increasing amount of buy-side firms opting for an automated approach for ‘ low-touch ’ trades , so that they ’ re able to focus on higher-value business . Through integrated connections to our platform , buy-side execution desks can use our rules-based trading functionality to automate large numbers of smaller-sized trades , while preserving the integrity and flexibility of the RFQ protocol . We ’ ve seen a great deal of growth in this functionality in terms of volume and increasing sizes across securities , and more recently including interest rate swaps .
How will MiFID II shape the future of transaction cost analysis ( TCA )?
Regulatory reform and the changing landscape of liquidity have led to a shift in focus to best execution and transparency . Investment managers now seek to monitor and quantify their ability to provide an optimum service for their clients . The regulatory requirements to demonstrate and validate best execution have also increased . These are driving a
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