Key Takeaways from Institutional Investor 2021 International TraderForum
October 6, 2021 | By: Iain Smith
Input into FlexTrade’s development and product roadmaps across our multi-asset suite of EMS solutions comes from many sources. Of course, regular client meetings, discussions with consultants, and our ongoing internal investment in research and development are just some of the many inputs we take.
Additionally, our conversations with prospective clients and our participation at industry events also help us keep our finger on the pulse on what is happening within the market. With this in mind, September 2021 saw a welcome return to 100% in-person events, with FlexTrade’s EMEA team attending Institutional Investor’s International TraderForum (ITF) conference.
The conference generated some fascinating discussions on subjects ranging from regulatory divergence to interoperability, innovation, and, of course, automation and operational efficiency. So, as the dust settles on what proved to be a great event and we begin to look forward to 2022, we thought it would be great to share three of the key learnings we obtained from 2021 ITF.
The industry is uniting to innovate and solve common problems through interoperability
Key members within the community are collaborating to deliver real innovation to drive workflow efficiencies, application interoperability, and a more unified desktop experience for the buy-side and member firm users.
An example of this new, united approach was illustrated during a panel on day one of ITF, featuring Dr Robert Barnes of LSEG’s Turquoise Plato, Adam Toms, European CEO of OpenFin and FlexTrade’s Managing Director of EMEA, Andy Mahoney.
The panel discussed an initiative to create a new, innovative solution to support liquidity discovery and execution opportunities. The initiative itself has been partly driven by a “call to action” from a Tier 1 global asset manager at 2019 International TraderForum, for market participants to deliver actionable intelligence to the buy-side desktop to enhance routing decisions.
Having pioneered an open, proactive approach to integration with complementary best-of-breed third party technology, FlexTrade Systems will be the first to deliver the Turquoise data feed into its FlexTRADER multi-asset EMS via the OpenFin message bus, FDC3. Traders can then act on that data, automate processes and take advantage of emerging liquidity opportunities. Further, and in direct response to the call for actionable intelligence, built-in visualisation capabilities within FlexTRADER EMS ensure the block trading activity from Turquoise Plato Order Books™ is easy to digest and subsequently interact with for trading teams.
Crucially concerning industry collaboration, Andy Mahoney from FlexTrade disclosed that the interface built is a standard, open integration rather than proprietary, meaning that other EMS vendors can utilise the API to benefit the broader community.
FlexTrade’s integration with Turquoise via OpenFin is the latest in a long line of recent integrations developed by FlexTrade and its industry partners. Other recent examples include a recent integration to IHS Markit’s pre-trade TCA data, emerging markets liquidity data provider, Flowlinx, Level 3 data provider, BMLL and bookbuilding solution, Appital.
The key takeaway is that the vendor and member community are listening, innovating and actively collaborating to deliver solutions that benefit the buy-side community as a whole.
Achieving scale efficiently and cost-effectively will be a key focus for 2022 and beyond
With rising cost pressures and increasing regulation, unsurprisingly, buy-side trading desks discussions, both directly and indirectly, continued to focus on achieving scale and operational efficiency.
Of course, applying automation, where possible, to current processes is an intrinsic factor in handling volume both efficiently and cost-effectively. Consequently, the need to automate further and more intelligently was the underpinning theme across several panels, from order handling to interoperability and sourcing liquidity.
A poll of the audience during the “Order Handling Automation” panel discussion suggested that while substantial progress is being made – around 57% had a proportion of their flows automated[1].
However, there is some work to do – nearly a quarter of the audience indicated they are still in the planning stages of where to apply automation to their workflows.
Discussions ranged from using advanced segmentation to create arrival rules and dynamics rules to create automation, for example, using non-traditional parameters such as time volatility, or time of day, to applying disruptive technologies such as machine learning to create clustering.
Further, once processes have been automated, the consensus was that better tools are needed to produce real-time alerts to sub-optimal trades and improved data visualization to enable teams to manage by exception quickly and effectively.
Looking further ahead to 2022, discussions with both clients and prospective clients throughout the conference centred around multi-asset automation in the next 12-18 months, specifically, around the area of Fixed Income. Following on from the panel discussions, the application of dynamic rules to create continuous re-evaluation of market conditions on instruments such as bonds, to enable quick adjustments was one of many requirements delegates were keen to learn more about.
Regulation – An evolution, not revolution, is expected
MiFID II and the topic of EU/UK regulatory divergence dominated the discussions around regulation and were fiercely debated across several panels featuring representation from the FCA and HM Treasury and supplemented by audience live audience feedback via polling questions.
The consensus from the policymakers featured on the panel was that the UK played a vital role in the design and objectives of the legislation, therefore, it is unlikely that there will be revisions to the broad framework.
Perhaps unsurprisingly, the most critical factor being scrutinised around determining the relative successes and perceived failures of the MiFID II legislation was cost. Polling from the audience identified the cost-effectiveness of the reform to be of concern, and any future amendments which increase the cost of operations for buy-side desks need to be carefully considered.
[1] Cboe’s Summary of What You Missed at International Trader Forum
Interested in learning how FlexTrade can help?
As buy-side teams begin to look towards finishing off 2021 strongly and planning to navigate the challenges which 2022 will bring, the FlexTrade EMEA team is here to help.
Whether you are looking to automate your fixed-income processes or consolidate multiple EMS solutions onto a single, scalable multi-asset platform, we would be delighted to discuss your requirements with you.
To further discussions, please contact:
Dan Enstedt – VP Sales EMEA – EMEA – Dan.Enstedt@FlexTrade.com
Manuela Bauer – Sales Director – France and Central Europe – Manuela.Bauer@FlexTrade.com