NEWS UPDATE
TECHNOLOGY
COVID-19 compliance weaknesses to drive rapid surveillance technology spend
Research has predicted trade surveillance technology spending could increase to $ 1.5 billion in 2021 due to compliance weaknesses identified by the pandemic .
Trade surveillance technology spending has increased significantly due to compliance weaknesses identified during the COVID-19 pandemic , according to research from Greenwich Associates .
Statistics from the research revealed that over the past decade , the trade surveillance technology market has grown between 13 % and 14 % year-on-year .
At the beginning of this year , Greenwich Associates predicted that trade surveillance technology market spend would reach $ 1.2 billion in 2020 . However , market volatility and uncertainty brought about by the COVID-19 pandemic meant firms have since adapted .
The subsequent need for infrastructure upgrades led the research consultancy to predict that the trade surveillance technology market will now grow 23 % in 2021 , taking total predicted spending to $ 1.5 billion .
“ Financial service firms have suddenly encountered a perfect storm of compliance challenges ,” said Greenwich Associates market structure and technology senior advisor , Danielle Tierney . “ Some firms were simply unable to maintain compliance and surveillance monitoring while continuing operations during at onset of the crisis .”
Compliance difficulties relating to the pandemic identified by Greenwich Associates include : difficulties obtaining monitored and secure system access , alert backlogs at firms with insufficient surveillance resources to manage market volumes and volatility , and problems adjusting monitoring capabilities and holistic surveillance integration .
FIXED INCOME
JP Morgan sees portfolio trading surge in the US
Client report from JP Morgan reveals the bank has already executed 77 % of its total 2019 volumes for portfolio trading .
JP Morgan has seen huge uptake in portfolio trading from its buy-side clients in the US amid the recent market volatility , according to a client report seen by The TRADE .
The client report from the bank ’ s credit trading desk revealed that so far this year , JP Morgan has executed 77 % of the total portfolio trading volumes it executed throughout last year .
In 2019 , JP Morgan ’ s trading desk saw volumes for portfolio trades jump 141 % compared to the year prior . A spokesperson at JP Morgan confirmed the contents of the report .
“ Couple these figures with the fact that three of the past five months have yielded a rise in monthly inquiry and traded volumes , it becomes clear to JP Morgan that portfolio trading is gathering momentum ,” the report said .
With the increased market volatility at the height of the coronavirus pandemic in March , JP Morgan added that investors saw portfolio trading as way to guarantee instant execution .
“ During periods of high volatility , the ability to manage fund inflows and outflows in an efficient and cost-effective manner becomes increasingly important . Portfolio trading offers a route to cost saving while also creating bespoke portfolios that cater to a fund ’ s unique trading needs .
8 // TheTRADE // Fall 2020