The FIA annual Expo in Chicago delivered a wide range of
themes and discussions across the listed derivative and cleared
Starting just after a wet and glum Halloween, and during an
unseasonable heat wave, the weather fairly reflected the
conflicting moods of the industry.
For the first time in decades the loop was almost devoid of
trading jackets after the CME closed most of its trading
A series of grainy old film clips showing some arresting
1970s fashion statements, hairstyles and facial hair ensembles
opened the event that, ironically, promoted innovation at its
The inevitable exposure of spoofing came under the spotlight
with the first jail sentence being given for activities dating
back to 2011.
It was interesting to see the growing number of new
technology vendors appearing to offer solutions for this and
other market supervision and abuse scenarios.
The usual defense of 'I just change my mind
quickly’ but not 20,000 times in a second, will
give rise to another level of machine-based intelligence.
It is impossible to avoid the evolving regulatory framework
and harder still to fathom the real impact on how the business
will be able to encompass even more demands.
What is clear is that more and more information is being
required to be captured, reported, analyzed and processed. And
with that the ownership, intrinsic value and fundamental record
of data will dominate much of the attention of Mifid II (as
well as the budget of those the directive will affect during
the 2016 build up and into 2017).
I spoke to the head of a major global bank FCM and the
regulatory demands over capital are, in his mind, the biggest
threat to the industry ever.
The lobbying and increasing, yet guarded, co-operation
between the protagonists could throw some sunshine onto what
looks like a potential gloomy outcome. Let’s see
No self-respecting conference or exhibition these days can
be without a Fintech innovation slant and this year, 20
selected firms were able to showcase their wares in a dedicated
With the aforementioned backdrop of 'goodbye to the floors
and hello innovation’, it was interesting to
ponder over what we mean by innovation and what is just really
A quick google search later and I am told that evolution is
'the gradual development of something, especially from a simple
to a more complex form’, whereas innovation is
'the process of translating an idea or invention into a good or
service that creates value’.
It’s interesting to consider these descriptions
in light of the many new 'innovations’ in our
We are certainly living in an era of unprecedented
technological innovation, that’s for sure, but
when we come to Fintech, perhaps some
'innovations’ aren’t that at all and
just good old fashioned evolution? Language is a complex
And finally data. Be it more surveillance, regulation
infrastructure, reporting or technological advances, what is
clear is that the listed and cleared swaps world will create an
ever-increasing avalanche of data.
The layering of data on top of complex technology
environments will become an increasing area of focus and
concern for participants and regulators alike.
And with more data will come an even greater need to adopt
intelligent computer science-based approaches to make sense of
The traditional approaches of either setting up a vastly
expensive project in conjunction with a consultancy firm or
employing thousands of temps on spreadsheets will just not
We have seen quantitative, computer based analytical
approaches in algo trading for years, it is now the time for
the same advances in the post-trade environment.
The value of data and its analysis will increase and become
a crucial commodity as the industry looks to come out of the
doldrums and re-invent itself in the new regulatory
The commercialising of some exchange data to members, the
recent ICE purchase of Interactive Data for £5.2bn and
regular fines for misreporting just go to show how data is
moving centre stage of the financial markets.