One line in the
midweek column tweaked some interest among the readership, my mention of the
“juniorisation” of the sales role in the banking world.
I must confess I
hadn’t thought about it too much, it has very much ...
Any group’s reputation is dependent upon
its weakest link and as such the foreign exchange industry could be treading on
thin ice thanks to the apparent actions of one such “weak link”.
Sadly, we are back on the subject ...
column two weeks ago on benchmark fixings prompted quite a response – to
the degree that I feel it is necessary to go into it a bit further and ask the
question, “Can there be a justification for offering mid-rate ...
The major liquidity providers in FX are looking at their client tail - and the sharper, or smarter, traders are being cut. Part of me thinks these traders should take their chances with the other professionals, but I am worried that some - as evidenced by a recent conversation - have this view about asset managers and corporates. Of course tensions exist in relationships between provider and consumer but the solution should be simple and not to the detriment of the wider world.
new rules, according to a survey by the Alternative Investment Management Association (AIMA).
Fund managers globally that responded to the survey said that their biggest challenge regarding Mifid II is uncertainty about what the rules contained within the regulation actually mean – both their scope and substance – as well as what they perceived to be a lack of clarity relating to the cost and nature of services provided by brokers.
The survey showed that 34% of alternative asset managers are undecided about how they will pay for research following the implementation of Mifid II. Of those that have made decisions around how to pay for research, 80% plan to charge investors and the remaining 20% intend to absorb the costs themselves.
Liquidnet has published the high level findings of a recent survey of asset management firms that probed their views of best execution requirements under MiFID II.
The study finds that just 6% of those surveyed believed they are currently ready to meet best execution requirements, and 61% of respondents recognised their need to provide more granular detail to their policies, with a third planning to make changes to trading workflow. In addition, over a quarter are specifically investing in technology to ensure a more systematic approach to best execution.
The paper has been a long time in the works, so the IA's proposed guidance around last look may not burst the bubble of those optimists who think last look is a dead issue, but it should concern providers that their clients apparently think they don't go far enough. That said, I also think this paper highlights how the buy side can be too demanding around certain issues when it could focus on having a more positive impact by doing something itself.
Two and a half years on from acquiring Molten Markets, EBS is beginning to claim some tangible traction amongst the asset management community.
When Molten Markets, founded in 2012 by State Street alumni, was acquired by then-EBS-BrokerTec in 2015, there was a clear logic to both sides of the deal. For EBS, the move was part of a broader strategy to diversify the brokerage’s existing client base, while for Molten Markets being part of a larger, more established company with superior financial resources made its platform a more attractive proposition for the asset managers that it was targeting.
However, while the logic was clear from the start, progress in getting asset managers live on the platform, now branded EBS Institutional (EBSI), has been slow.
The FX industry is a vibrant, innovative place, but sometimes I think it forgets why it exists. This amnesia means as an industry, FX does not respond sufficiently on those occasions when people with no understanding of the nuances of the business suggest “improvements”.
So many news threads running through the industry at the moment seem to be idealising a totally transparent, all-to-all trading environment. This works in domesticated markets like equities, but it doesn’t work in global, institutional markets like FX – especially when we remember why we are here.
State Street Corporation has entered into a definitive agreement to acquire Charles River Systems a provider of investment management front office tools and solutions, for $2.6 billion. The acquisition, which is subject to regulatory approvals and customary closing conditions, is expected to be completed in the fourth quarter of 2018.
State Street says that the integrated systems will enable it to deliver “a global front-to-back platform for asset managers and asset owners that will be unique in the investment servicing industry”.
Benchmark fixes have been immersed in controversy for the past five years, but anecdotal evidence sees no shift in asset manager attitudes to them. Colin Lambert asks, will these firms ever desert the Fix?
If there has been one lightning rod for controversy in what has been a pretty turbulent period for the foreign exchange industry it has been benchmark fixes. Banks have been fined, traders and managers have been dismissed, and some are facing legal sanctions, including jail, thanks to various activities all of which were centred on the WM and European Central Bank fixes.
The band is back together again in this week’s podcast as Galen Stops returns from a short holiday to join Colin Lambert to discuss all things currency – this week (much to the relief of P&L’s audio engineers) with no interruptions from wildlife or pool attendants!
Listen is as they highlight growing concerns in the industry that it may be harder to spread the word about the FX Global Code than previously thought, thanks to the realities of life on buy side and vendor side. On the subject of transparency and ethics, Lambert is keen to talk about the new phenomena of “full amount” trading in FX markets and Stops expresses his feelings about the proposed Code of Conduct for cryptocurrency markets.
As always there is room for the random, so why does Lambert want a merger between the new digital assets association and the recently renamed Wholesale Markets Brokers Association? Listen in to find out.
Simon Wilson-Taylor, head of EBS Institutional, reflected at Forex Network Chicago on the challenges that he faced as the owner and head of a fintech firm, Molten Markets, prior to being acquired by EBS.
“The first thing that I would say to any budding entrepreneurs out there is that building something, building a product, is the fun part and the easy part. Even finding clients is relatively easy,” said Wilson-Taylor, before adding: “The really difficult part that’s kind of out of your control is: how are my clients going to react? How is the market going to react? What are my legal, regulatory and insurance obstacles?”
Going through the different business lines that Molten Markets operated, he explained that consultancy is a good way for fintech firms to generate some revenue and pay some bills as the barriers to entry are not particularly great.
A new study by State Street indicates that 68% of institutional investors are concerned about their ability to hit their growth objectives within the current market environment.
The survey also found that 72% of asset owners expect to adopt a more defensive investment strategy going forward and the same percentage of asset managers will slow their plans for expansion over the next five years.
State Street’s second Annual Growth Survey talks to more than 500 global asset managers, asset owners and insurance companies.