Buy-side firms distrust disparate data - SimCorp
Nearly half of all buy-side firms are not confident the data they receive from their systems is consistent and reliable, according to a new survey by investment and portfolio management software and services company SimCorp.
The results revealed that 40% of respondents were not confident in their order management systems, accounting, performance and risk systems, while 67.4% believed there was significant effort involved in reconciling data between disparate systems and sources. A further 22% indicated it would take days to generate a report calculating their firm’s exposure and performance across all holdings, including derivatives. Nearly 8% responded that such reporting would take weeks.
“The statistics are distressing,” said Matt Samelson, principal at US-based financial research and consulting firm Woodbine Associates. “According to these numbers, 40% of those surveyed are making investment decisions based on poor quality data, and nearly 30% do not have a near real-time view into their exposure, making it impossible for these firms to be agile and respond to shifting market dynamics. We as a community need to galvanise change in order to restore investor confidence.”
The survey was conducted in December 2011 and nearly 100 executives from 50 buy-side firms across North America were polled.
OpenLink offers compliance technology ahead of Dodd-Frank
Trading, risk management and processing software provider OpenLink Financial has started a series of initiatives focused on accelerating compliance with Dodd-Frank regulatory milestones scheduled for 2012.
The Dodd-Frank Wall Street Reform and Consumer Protection Act aims to improve transparency and reduce systemic risk in the US OTC derivatives markets. OpenLink has stated that it is dedicating itself to addressing the impact this will have on financial institutions, including regulatory reporting requirements, position limits and OTC central clearing.
The firm has put together a Dodd-Frank regulatory compliance reporting package, which includes position reports; real-time Commodity Futures Trading Commission (CFTC) position limits monitoring designed to help firms comply with position limits set by the CFTC; swap data repository reporting; and OTC clearing workflows, which have been designed to help firms manage their trade life cycles, including post-trade requirements for cleared OTC derivatives.
“Our suite of regulatory compliance solutions will enable clients to leverage their technology investment in OpenLink to comply with these new requirements and the accompanying changes that will transform the derivatives trading landscape,” said Phil Wang, senior vice president of product management at OpenLink.
Fator securities opts for SunGard connectivity and OMS
US broker-dealer Fator Securities, the US distribution arm of the Fator group of companies in Brazil, has chosen the Valdi order management system (OMS) provided by financial technology company SunGard for trade management. The firm has also chosen the SunGard Global Network for global connectivity.
Fator Securities provides asset managers and broker-dealers with brokerage and trading solutions and market access to Latin American exchanges. The intention is for SunGard’s solutions to help Fator Securities manage trade execution, automation and connectivity to the 120 markets and 500 brokers on the network, while reducing the firm’s technology costs.
The Valdi OMS is designed to provide a consolidated view of trading activity with access to global markets and multiple asset classes. It is also built to help user firms monitor positions and manage risk around the world on one screen. Meanwhile, the SunGard Global Network provides connectivity to a set of global equities and derivatives exchanges.
Fidessa debuts intelligence service
Trading solutions provider Fidessa has launched Fidessa Intelligence, an initiative designed to provide analysis tools for buy- and sell-side firms to better understand their trading environment, identify new opportunities, fine-tune their execution activity in real-time and independently measure and benchmark their overall trading performance.
The first of these tools, Fidessa Trade Intelligence, which is now available in the US, is designed to help brokers capture and filter data from disparate sources. Integrated into the company’s sell-side order management platform, Trader Intelligence has been built to improve workflow by aggregating market data, trading data, holding data, opportunity crossing data, trade adverts, indicators of interest and execution cost analysis. It also aims to provide integrated news and block trade data to help traders identify market-moving events, with the option to include shareholder information into the sales trader’s blotter.
All the data can be filtered, analysed and manipulated. Trade Intelligence also has tracking features and query tools to let traders rank their clients’ interests based on configurable weightings of current, historical, watch list and holdings information.
Fidessa also plans to include tools for interpreting trading performance and adjust execution parameters in real-time, produce reports that analyse and benchmark post-trade performance and provide a broker-neutral measure of execution quality as well as a ranking of executions trade by trade.
MarketAxess extends access to Brazil
US-based bond trading platform operator MarketAxess Holdings has received authorisation from Brazil’s Comissão de Valores Mobiários (CVM) and the Central Bank of Brazil to offer e-trading of local currency debt.
Brazilian local currency government and corporate bonds are now available on the MarketAxess trading platform. Users can request competitive executable bids or offers to multiple broker-dealers and execute with their choice.
MarketAxess said it had 10 dealers already prepared to provide liquidity in Brazilian local currency bonds on the platform.
“The current estimated average daily volume in the Brazilian local debt market is approximately US$5.1 billion and we believe access to this marketplace represents an important development for our emerging market clients, eager to participate in one of the world’s fastest growing local currency debt markets,” said Kevin McPherson, head of sales at MarketAxess.
MarketAxess has offices in London, Chicago and Salt Lake City. The platform is already used by 850 institutional investors, mostly for US and European bonds as well as emerging market bonds and credit default swaps.
US exchange operators Direct Edge and BATS Global Markets have both separately indicated that they are interested in setting up a rival trading platform in Brazil to compete with incumbent exchange BM&F Bovespa. However, any such move would need to find a solution for clearing and settlement, as BM&F Bovespa has stated that it would not provide post-trade support for any competitor entering its home market.