Pressed heavily by regulatory costs, sell-side firms are increasingly turning to off-the-shelf IT solutions.
By Dan Barnes
Pressed heavily by regulatory costs,
sell-side firms are increasingly turning to off-the-shelf IT
Barclays’ decision to
outsource its post-trade derivatives trading technology to
capital markets IT giant SunGard comes as a slew of sell-side
firms have stepped back from the servicing
clients’ trading and post-trade derivatives
Gerry Turner, managing director at
technology provider Object Trading, said: "Futures commission
merchants (FCMs) are kept busy try into keep the lights on.
They are trying to do that with less resources. Volumes are not
as good as they were and interest rates are near zero or below.
The whole FCM model is a challenge."
In February 2015 there were 74 FCMs
registered with US regulator the Commodity Futures Trading
Commission (CFTC), down from 91 FCMs in February 2015, a
reduction of 18.6% in a year. The last twelve months have also
seen large banks pull banks from plans to provide swaps
clearing services, citing regulatory pressure. In this
environment, derivatives brokers are increasingly looking to IT
vendors to support their technology requirements, instead of
relying on their in-house teams.
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