Chicago is experiencing a mini-boom in new, small prop shops, says Fintan Quill.
Regulation today is having a profound influence on the
global business landscape. Many of the stories in
today’s news are about market volatility,
fragmentation and difficulties facing today’s
financial markets including whether regulation has helped or
hurt in improving the economy in the face of the global
financial crisis. Amidst the chaos, one regulation in
particular, is bringing about innovation and new business
opportunities – in Chicago.
The Volcker Rule, which is part of the larger Dodd
Frank Financial Reform Act, bans the practice of proprietary
trading at banks. As such, as banks now have to dispose of this
arm, proprietary trading is finding a new home; these traders
are fleeing banks to set up small, independent proprietary
trading companies. They have money under management from
outside investors, and they are trying to make money for
themselves which brings a new level of engagement to the
investment strategy process.
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