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Reflections on FIA's IDX 2023 in London

Regulation, efficiency, and technology, shaping the future of the Derivatives sector

After FIA’s IDX 2023 in London last week, we reflect on the value of being there and some of the key themes coming out of the event. Talking to many of the ETD team at IDX, they found it invaluable to catch up with clients, partners and peers from the industry. We hope those that were able to attend found it equally useful to connect with our team in person.

 What were the hot topics at the event? An overriding theme was the challenge and opportunity that technology, and in particular, the cloud and Artificial Intelligence (AI) present for the derivatives sector. This discussion dominated every session, whether looking at regulation, operations, or the future of markets. Let’s look at each in turn.

The Need for Greater Technology Regulation

Whilst most of the airtime around regulation is given to meeting the growing regulatory pressures brought about by EMIR and MiFIR. What was repeated in many of the sessions was the need to further regulate the technology companies providing sell-side firms with the infrastructure needed to modernise their derivatives businesses. The general feeling is that tech companies are responsible for providing many exciting technologies that the industry is still working out how to regulate. A good example of that is AI and the capture of data and how this affects privacy, security and sovereignty. Furthermore, little is understood about what impact these technologies will have on jobs and the job market in general as more aspects of trading become automated. Clearly, there is a key role for governments around the world to coalesce on a solution to quickly bring this sector under tighter control, a view echoed by many of the presenters and delegates at the event.

The Push for Operational Efficiency

Many firms are looking at ways to streamline their operations, especially around data management and data distribution, two areas coming under increasing pressure to innovate due to the growing regulatory and client demands. The mantra, of having the right data, available at the right time and in the right place is what guides ETD and why we have invested in both the volume and breadth of our data as well as mechanisms to ensure it’s available to our clients in whatever their preferred format or application, e.g. Symphony chat. Why not take a closer look at the ecosystem of partners we’re working with?

The Future of Markets and the Proliferation of the Cloud

Outside of regulation, this was the most debated topic. No one contested the clear value offered by embracing cloud computing to provide scale and automation efficiencies, however, there was considerable concern over the central issue of control being given up by financial institutions to a handful of technology companies (Google, Microsoft and Amazon) to run the backbone of their operations and therefore become a significant player in the running of those businesses. The notion that every business is now, first and foremost, a technology company throws into question where the real power sits in modern banking institutions.

IDX 2023 in London provided valuable insights into the current hot topics in the derivatives sector. The event emphasised the need for regulations to adapt to emerging technologies, holding technology companies more accountable. Moreover, the discussion and debate around these themes were healthy and a positive step towards ensuring positive change occurs as this sector continues to evolve.


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