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How the outsourced trading landscape has evolved over the past 12 months
The introduction of T + 1 in the US , consolidation of providers , and one of the largest asset managers in the world turning to outsourced trading were just some of the trends seen over the past year - so how does the space look different now compared with 2023 as changes continue to come at pace ?
In the post-pandemic world of outsourced trading there ’ s never a dull moment . By no means is it a new concept – just a rapidly evolving one – with the gathering pace of change seeing the industry shift into a higher gear with each passing year .
As a concept , outsourcing – born out of servicing smaller hedge funds post-financial crisis – represents a natural evolution towards front-office outsourcing , after the back- and middle-office migrations which had come decades before it .
The nature of the service is also undergoing its own evolution with a broader set of clients than ever before , along with ever-growing asset classes and regional coverage across an increasing number of providers .
As we ’ ve highlighted throughout this magazine , there are numerous pieces of research in circulation from the likes of State Street , Northern Trust and Coalition Greenwich which demonstrate just how much the space is growing . The numbers add to what we ’ re hearing anecdotally about a growing uptake from the buy-side outsourcing at least some aspects of their desks to third parties .
This has added to the ascension of co-sourcing ( as opposed to full outsourcing , which often implies an all or nothing approach ), something providers are very happy to do .
The 800lb gorilla has arrived The big news of the year on the client side was undoubtedly BNY striking an agreement with Goldman Sachs Asset Management ’ s EMEA business to deliver global trade execution services in EMEA , the US and APAC markets across fixed income , FX , derivatives and ETFs . This was a landmark moment which trumped all previously labelled landmark moments for outsourced trading .
26 // Outsourced Trading Handbook // 2024