[ I N - D E P T H
down high frequency traders.
The TRADE spoke with Kat-
suyama in November this - along-
side his former Royal Bank of
Canada colleague, president and
co-founder of IEX, Ronan Ryan
- and he explained the exchange
will continue to focus on execu-
tion quality and listings in the
near future. “I think people will
be surprised at the poor execution
quality on the exchanges that pay
the highest rebates,” he said.
IEX now holds 2% of market share,
compared with the largest exchange
which holds 14%. Katsuyama said
he is happy with the direction the
exchange is going and concluded: “At
the end of the day, the originator of
the orders - the buy-side and the bro-
kers - is the most important player in
the ecosystem.”
Michel Barnier
Michel Barnier has been heavily
involved in two market-defining
moments over the last decade - the
financial crisis in 2008 and Brexit.
He is a politician for the French
parliament and has been foreign
minister for the country between
2004 and 2005.
Bernier played a key role in
reforming regulatory market struc-
ture after the financial crisis in
2008. He was appointed as head of
banking legislation in 2010 and has
issued around 40 proposals which
have revolutionised the banking
industry since. Barnier controver-
sially argued against short selling
and promoted the idea of a cap on
banker bonuses, which didn’t go
down well with the industry.
These days, Barnier has been
tasked with leading the UK’s
negotiations with the European
Union following the referendum
result. When he was initially
appointed to lead the negotiations,
he understood many thought that
due to media speculation and his
reputation as a tough regulator in
London, he would drive a ‘hard
bargain’ for Britain.
He said in July this year: “I know
what’s written in some British
newspapers, I used to read the
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5 0 T H
I S S U E ]
Michel Barnier
same thing seven years ago when I
was Commissioner in charge of the
single market and financial regu-
lation. At the time I was called the
‘Most dangerous man in Europe.’”
He began his role in October
this year and has built a team to
help him disentangle Britain from
the EU budget, trade and foreign
policies.
THINGS TO LOOK OUT FOR IN THE NEXT 50 ISSUES…
Blockchain
The hype around blockchain has
been prevalent in 2016, with the
disruptive technology promising to
lower costs, improve transparency
and reduce the overall complexity
of financial transactions. In some
cases, blockchain could possibly
replace current centralised busi-
ness models in the financial sector,
as distributed ledger technology
(DLT) works its way through
disrupting the industry one section
at a time.
Large banks have taken a keen
interest in blockchain, some exper-
imenting and even implementing
the technology into existing sys-
tems. Northern Trust, BNY Mellon
and State Street – just to name a
few – have all been very proactive
in the blockchain space.
DLT could revamp regulatory
reporting and even remove the
necessity to use clearing houses for
OTC derivative clearing. This is
not before it has disintermediated a
host of middle and back office roles
across financial institutions.
Utilising blockchain could also
render exchange-traded and OTC
derivatives reporting to trade
repositories or US swap data
repositories obsolete if the infor-
mation were shared via DLT. If
“Liquidity is now in the hands of the buy-side and
the challenge ahead is moving the liquidity from
buy-side books, rather than sourcing it.”
Winter 2016
TheTrade
37