Category Archives: Current Events

Is Tech Driving Business Growth?

This might be heresy for a financial technology blog, but is technology driving business growth in the capital markets?

I ask this because I had an organizational call for a panel discussion I’m moderating during Linedata Exchange New York on October 7 this morning.

The panel,  entitled “Truth or Myth? What Drivers Really Play a Role in Growing the Business Today?”, promises to be an interesting conversation with Jeff Scannell, vice president of trading technology at State Street Global Markets; Ryan Bateman, director of technology at Sands Capital Management; Jonathan Wang, head of business development at TPG-Axon Capital;  and Dushyant Shahrawat, research director at CEB TowerGroup.

It was relatively easy to cover the capital markets from a technological perspective before the 2008 financial crisis. Reporters only had to ask technologists how the specific investment would generate more money for the firm or how would it save the firm money, which could be used to make more money.

After 2008, Dodd-Frank, EMIR and Basel III, reporters started to add a third uncomfortable question: “How will this investment keep the company from being fined by regulators and appearing on the evening news?”

Over the past six years, I have not heard many technologists discuss how IT investments drive business growth. Instead, they have returned to the bearish mantra of doing more with less while throwing available resources at the middle and back offices.

It’s no longer a matter of capturing alpha, but controlling costs and improving internal efficiencies. Hence, why hosted-platforms, outsourcing, cloud computing and their management are the topics of the day.

Looking at my inbox, emails pitching trade reporting, margin management and risk analytics outnumber trade-execution pitches on  low-latency messaging, trading algorithms or smart order routing, at least six or seven to one.

Until some level of volatility comes back to the markets, most firms are left treading water and updating their middle and back offices and it will not change until the US Federal Reserve and the other central banks take their feet off the interest-rate brakes. Then we will see the pendulum swing back to greater investments in the front office.

Am I wrong?

Let me know.

 

 

 

 

Once more into the breach, dear friends, once more…

I know Wall Street’s grapevine is second to none when it comes to job changes and departures, but I’d like to update those who have not heard the news: After a few months at Asset International as the first joint US editor for The TRADE and Global Custodian, I’m back to freelancing.

The role always was an experimental one and not all experiments work out, hence the term.

There are some great people on both publications and I’ll miss working with them daily.

In the meantime, I finally can give this blog the attention that it deserves.

 

Omega Securities Mints New CEO

Sean Debotte has been named president and CEO of Canadian equities and fixed-income alternative trading system (ATS) operator Omega Securities, corporate officials announced today.

Debotte first joined Omega in 2011 as director of business development. He replaces Brian Crew, who departed in October 2012- the same month that Omega began opening its planned Lynx ATS to industry testing.

Officials expect that the new platform will go live on February 3, but are still waiting for the Ontario Securities Commission (OSC) to sign off on the market’s Dynamic Pricing Model that determines a maker/taker rebate for each security based on its previous month’s trading volume.

The new ATS will use the same order entry and market data protocols as the Omega ATS and will not charge market data, subscription or connectivity fees.

The only other difference, say officials, is that Lynx will use broker attribution as a default setting.

Omego Names New Leadership

The post-trade industry utility Omgeo announced a leadership change earlier today with the planned departure of CEO Marianne Brown in the second half of February.

This is the first major management change for the company since the Depository Trust & Clearing Corp. (DTCC) acquired Thomson Reuters’ half of the joint venture in October.

Brown joined Omgeo in 2006 after being the chief executive of the Securities Industry Automation Corp.(SIAC). Industry veteran Paula Suasville Arthus will take on the role of president and CEO of Omgeo and report to Andrew Gray, managing director and head of core business management at DTCC. Prior to her new appointment, Sausville Arthus has been managing director, chief of staff and head of enterprise planning at DTCC

I’ll be curious to see what direction the DTCC plans to take its wholly owned subsidiary now that Omgeo does not have to keep a for-profit parent owner and an industry utility parent owner simultaneously.

Will DTCC let Omgeo maintain some semblance of independence or will it become a DTCC brand, like what happened to financial-intranet provider Radianz when Thomson Reuters sold it to BT in 2005?