advancements , buy-side users also have to be more mindful about market resilience and maintaining stable markets . For the buy-side , having a range of sell-side counterparties can help reduce the likelihood of being impacted by any issues related to faults in technology . More specifically , ensuring that sell-side counterparts are not all using the same technology or trading strategies is paramount to reduce domino effects in a breakdown event .
“ As the early days of Covid demonstrated , sellside traders are an integral part of maintaining and cultivating partnerships , and ensuring access to breadth and depth of market liquidity during bouts of volatility ,” notes Fromer . “ A trading desk cannot rely on just one . It needs to assess the environment and specific trade before executing to ensure the best outcome for the client .”
However , for effective transparency to be achieved it is essential that technological advancements do not lead to the overstimulation of buy-side counterparts . Despite such activities coming with pure intentions , they can become counterproductive as they either require additional screen space or lead to spamming users .
“ It is vital to understand the importance of quality over quantity . As a sell-side we should only send the buy-side information they care about , ensuring that it is clear and concise – that is best achieved by combining both human and technological approaches ,” says Winzor-Saile .
In addition , technology can aid more positive engagements with second line risk and compliance colleagues . New advancements also enable the buy-side to benefit from straight through processing in the trading process , a key benefit for large trading desks .
The continuous advancement of technology is proving to be helpful in streamlining various trading processes , alongside helping bolster efficiency . The adoption of technology is undoubtedly resulting in shifts in the way the buy- and sell-side interact . However , the value of these two separate counterparts is still proving key , despite an evolution in the way in which these two parties cater to each other .
Issue 81 // thetradenews . com // 19