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The Expert View
Admit It. Fix It. Move On.
May 16, 2012
When you face an “unfortunate incident” like a $2 billion trading loss, own up to it, repair it, make your company better for it, says JP Morgan Chase chairman and chief executive Jamie Dimon.
Europe, Asia, the U.S. and T+2
May 10, 2012
The time is now for the global markets to achieve a shortened, harmonized settlement cycle, says Lee Cutrone of Omgeo.
Blueprints for New Practices
May 7, 2012
Here is the Securities Industry and Financial Markets Associations set of blueprints for present and future initiatives dealing with the cumulative impact of new regulation, from executive vice president Randy Snook.
Financial Stability, Soundness, and Infrastructure
May 4, 2012
The foundations of the U.S. securities regulatory system were based on outdated assumptions about the nature of financial firms, their activities, and their relationships, says Cyrus Amir-Mokri, assistant secretary of the U.S. Treasury.
Protecting Customer Assets
April 30, 2012
In the aftermath of MF Global, customer funds protection provisions of the Commodity Exchange Act and Commission regulations need review, says CFTC Commissioner Jill E. Sommers.
Emotion as an Asset Class
April 27, 2012
Smart investors will start regarding emotion as something they can base investment decisions on, say Rob Davenport and Lee Hull of The Connors Group, a research firm that quantifies investment ideas.
Competition, Post-Crisis
April 23, 2012
Efficient players bring more innovation and transparency to markets, says Joaquín Almunia, EU vice president for competition policy.
The Case for Cost-Benefit Analysis
April 20, 2012
Before Dodd-Frank Rules are implemented, make sure each “proposed rule is optimal among all reasonable alternatives,’’ says Jacqueline C. McCabe of the Committee on Capital Markets Regulation.
How Rising Rates Will Affect Stocks
April 16, 2012
Higher ground for interest rates is not a major threat to U.S. and global stocks this year for two reasons, says Russ Koesterich, chief strategist for BlackRock's ETF business.
Dealing With Uncertainty
April 13, 2012
Last year was a challenging year for mergers and acquisitions between financial services firms, according to PricewaterhouseCooper’s latest M&A insights report.
Identifying and Eliminating Market Manipulation
April 9, 2012
Fostering 'fair play' -- surprise -- results in more liquidity, better spreads and more activity for an exchange, says Neil McGovern of Sybase.
Three Missions, Five Goals
April 4, 2012
From improving market practices to more collaboration between parts of the securities industry, Jan Ellis Snitzer sets out this year's agenda for ISITC, the trade group focused on standards in transaction processing.
Take No Algo For Granted
March 30, 2012
The CFTC is likely to adapt its oversight to include the tools of electronic trading, commissioner Gary Gensler notes.
The Humility Technical Failure Brings
March 26, 2012
Not measuring up to the excellence expected of one's company, even due to 'serious technical failure,' is humbling, CEO Joe Ratterman told customers and exchange members in the wake of BATS Global Markets' inability to bring its own stock public.
Re-Constructing Engagement
March 21, 2012
Market players need to try and reach a meeting of minds on money market mutual fund reform, says SEC commissioner Elisse Walter, and not sit out the final stages.
Three Dangerous Clouds
March 19, 2012
The ripple effect of the Volcker Rule, the SEC's 'outrageous' plans to reform money market funds and the CFTC starting to regulate use of derivatives are dangerous clouds hanging over the mutual fund industry, according to ICI general counsel Karrie McMillan.
Eat Your Dividends
March 16, 2012
Buy and hold high-quality stocks for their dividends, is the key to a healthy diet, says Josh Peters at Morningstar.
Oxygen Treatment
March 12, 2012
Volume is oxygen to traders. Direct Edge CEO William O’Brien says an end to the thin air now being inhaled could be unmasked by year’s end.
Taking a Position on Position Limits
March 9, 2012
Is there excessive speculation in oil and is it impacting gas prices? Yes, says CFTC commissioner Bart Chilton.
Past and Future of Fighting Money Laundering
March 5, 2012
Fighting money laundering must get more rigorous and nuanced, says SEC counsel David W. Blass.
Answer the Call
March 2, 2012
BlackRock chief Laurence D. Fink says leaders of business, finance and government all must work together to restore confidence in capital markets.
Defining High Frequency Trading
February 27, 2012
CFTC Commissioner Scott O'Malia is trying to define exactly what constitutes high-frequency trading. So it doesn't get whipped in the wind.
Breaking the Divide Between Front, Middle and Back Offices
February 24, 2012
Compliance has traditionally been thought of as a back office function.
However, with the onslaught of financial regulation in 2011 most firms must reconsider that, says David Fetter, chief executive of Quadron Data Solutions.
A Losing Hat Trick
February 17, 2012
The SEC's upcoming proposal to tighten the regulation of money market funds will harm investors, damage financing for businesses and governments and jeopardize the economic recovery, says ICI president Paul Schott Stevens.
Quo Vadis Europa?
February 13, 2012
Discretionary State intervention and protectionism are not the way forward to overcome the financial crisis and to adapt to the process of globalization, says European Commission industrial policy vice president Joaquín Almunia.
4 Tenets in Technology Services
February 10, 2012
With the Deutsche Boerse waltz behind it, chief executive Duncan Niederauer explains how NYSE Euronext intends to become a facilitator and enabler of capital markets.
When An Account is Hacked
February 6, 2012
What to do when brokerage account information gets pilfered, according to Reuters contributor Lynn Brenner.
DB-NYSE Deal Breaker: ‘Closed Vertical Siloes’
February 2, 2012
Joaquín Almunia, vice president of the European Commission responsible for competition policy mergers explains why the Deutsche Boerse-NYSE Euronext merger was prohibited.
Making Sense of Identifiers
January 30, 2012
Incorporating new standard identifiers into the existing soup of overlapping symbologies presents data management challenges to financial institutions, says Stephen Engdahl, senior vice president of GoldenSource.
Getting the Message on Collaboration
January 27, 2012
Securities firms need to demonstrate that they can come up with solutions that satisfy regulators on both sides of the Atlantic, as they overhaul capital markets, says Karla McKenna at ISITC. Here's what you can do.
A Shifting Mood?
January 23, 2012
Americans seem to be recognizing that the recovery is starting to pick up ground, says Jim O’Neill, chairman of Goldman Sachs Asset Management
The Next Cost Basis Challenge
January 19, 2012
The deadline for issuers to file 2011 corporate actions was Jan. 17. The devil will be applying the details to the cost basis of securities, says Stevie Conlon, tax counsel at Wolters Kluwer Financial Services.
Blindingly Obvious
January 13, 2012
A combined Deutsche Boerse-NYSE derivatives business would increase, rather than reduce, competition, if judged on a global scale. That's a point to be drawn from NYSE Euronext chief executive Duncan Niederauer's message to employees this week, as the two firms' merger foundered in Europe.
CSI: Outsized Returns
January 9, 2012
The SEC's new focus on returns will help it, in the words of Deep Throat ... "Follow the Money."
Pockets of Opportunity in 2012
January 5, 2012
Here are the most important global market structure trends of 2012, visible at its start, from Alison Crosthwait at Instinet.
Getting Agile in Emerging Markets
December 19, 2011
In emerging markets, technology organizations need to respond quickly and reliably to rapidly changing business needs, says SunGard's David Chapman.
From Canada With Love
November 28, 2011
Alison Crosthwait of Instinet reaches out to buy-side traders Down Under on the historic occasion of the launch of Chi-X Australia.
The Girl With the SEC & FINRA Tattoo
November 22, 2011
Brian L. Rubin and Katherine L. Kelly analyze disciplinary actions taken by and tattoos placed on the records of Chief Compliance Officers by the two regulatory bodies.
Germany's Position as a FInancial Center
November 14, 2011
Stock markets “are exhibiting a clear trend toward Europeanization of trading,’’ Deutsche Boerse CEO Reto Francioni told attendees of Euro Finance Week on the eve of its merger with NYSE Euronext.
Exiting This Uncomfortable Period
November 7, 2011
Halfway through the transformation of the securities industry, is the system better?, asked president Tim Ryan at the start of SIFMA's annual meeting.
Does FINRA Regulate Cloud Computing?
October 31, 2011
Broker-dealers are taking a liking to cloud computing. But moves into the cloud may heighten their oversight by FINRA, say securities lawyers Richard Sharp and Michael Kurzer at Milbank.
Identity Call
October 26, 2011
What makes a "Margin Call,'' as in the movie, really work right is the call for the identity of the counterparty, says Financial Intergroup president Allan D. Grody.
Retooling Market Surveillance
October 24, 2011
FINRA is refining and retooling its automated surveillance patterns to detect manipulation in a market where high-frequency and algorithmic trading predominate, says chief executive Richard G. Ketchum.
Algo of Choice in Tough Times is the Human Equation
October 17, 2011
The simple fact is that machines cannot replace people in today’s high-speed markets, says Scott Cooper of JonesTrading International.
Data is Not Costly. Bad Data is.
October 10, 2011
With rogue trading again making headlines, data quality can’t be ignored. In an investment bank or any asset management firm, your controls are only as good as your data, says Alberto Corvo at eClerx.
Short Sale Bans Harm Quality of Markets
October 3, 2011
There is no evidence that banning short selling of financial stocks calms markets. And it may harm them in the process, argues Alison Crosthwait of Instinet.
The Road From Here
September 22, 2011
A global system for identifying legal entities is on the cusp of becoming a reality. The road from here, from Tom Price of SIFMA at the SIBOS conference in Toronto.
The Danger of Inconsistency
September 12, 2011
Coordination of new rules across regulators, jurisdictions and geographical borders is just not happening at the level it should, says Tim Ryan, the chief executive of the Securities Industry and Financial Markets Association.
Brokerage CEOs in the Crosshairs
August 31, 2011
The enforcement chiefs of both the SEC and FINRA have made it clear that presidents and chief executive officers of broker-dealers are in their sights. Here are examples from securities counsels Brian L. Rubin and Yvonne M. Williams.
Is There Really a Future to Trading on Twitter?
August 25, 2011
Predicting stock market moves using Twitter alone is about as reliable as a witness in the Raj Rajaratnam insider trading trial, says Dr. John Bates of Progress Software.
The Flush Recession
August 19, 2011
Since 1950, the United States has never entered a recession with corporate balance sheets as flush with cash as they currently are, says Bob Doll, the chief equities strategist at BlackRock.
S&P's Flawed Thinking
August 11, 2011
After all, S&P should have properly assessed the asset-backed housing securities that led to the Great Recession not as investment-grade but what they actually were: Junk. So posits Money Management Executive's Lee Barney.
Some People Actually Pay for These Opinions?
August 8, 2011
Rather than paying S&P for its opinion, all you needed to do is look at some past CBO projections and you would have arrived at the same opinion years ago.
Fraud, According to FINRA
July 29, 2011
I was considered “a serious risk to the investing public” by FINRA. I am not. And here is my side of the story, says Brian Alfaro, founder of a Texas broker-dealer firm that has now closed.
The Market is Not Free
July 21, 2011
Is socialism creeping into securities markets? Here's the case from Tim Quast, managing director of Modern Networks.
STP – Still a Dream?
July 15, 2011
STP is not an engine oil. But straight-through-processing would make it possible for all financial edges to work smoothly with each other.
Protect Files, Before They Get Away From You
July 7, 2011
The convenience and growing use of tablet PCs and smartphones exposes security gaps and new risks when customers and employees alike store sensitive data on their personal devices, says Rob Marano of InDorse Technologies.
Embracing Legal Entity Identification
June 24, 2011
The Legal Entity Identifier (LEI), the creation of the U.S. Treasury’s new Office of Financial Research (OFR), has now been endorsed by a SIFMA-led coalition of financial industry trade associations.
Finding Speed on Web
June 17, 2011
When financial markets plunged during the Flash Crash of May 6, 2010, website response time for the leading online brokerage firms went in the opposite direction, spiking to 30 seconds or more.
Making Swaps Transparent
June 3, 2011
The more transparent a marketplace is, the more liquid it is for standardized instruments, the more competitive it is, says Gary Gensler, chairman of the Commodity Futures Trading Commission.
Opening Shanghai
May 20, 2011
Shanghai will have to become a major international financial center, as China begins to rival the U.S. as the world's greatest economic power. In the last five years: the Shanghai Stock Exchange has seen its worth grow five times, notes Professor K.C. Chan.
Legal Entity Identifiers: Finally, It’s Time
May 12, 2011
Competing systems for identifying legal entities seriously hinders capital markets from working efficiently. That should change now, says Tim Rice of Thomson Reuters.
Life After The Flash Crash
May 6, 2011
The Flash Crash "sucked all the confidence, the money and the life out of equity markets around the world," on May 6, 2010, says Seth Merrin, founder and CEO of Liquidnet Holdings, which operates a leading block trading venue for institutions. One year later, Alison Crosthwait, director, Global Trading Research at Instinet, says limits up and down on stocks are the best response.
The Chicken, The Road & Rethinking Risk Management
May 2, 2011
Chief Executive Donald Donahue describes how The Depository Trust & Clearing Corporation is "completely overhauling" its approach to risk management, at the outset Monday (May 2) of the 2011 Operations Conference of the Securities Industry and Financial Management Association.
Bringing Sexy (to the) Back (Office)
April 28, 2011
It’s important to remember that low-latency, high-frequency trading represents just a sliver of capital markets technology spending and overall capital markets activity.
Re-Mapping the Cloud
April 13, 2011
The challenge is finding ways to bring on enough computing capacity, on-demand, while controlling costs, say Dr. William L. Bain and David Worthington of ScaleOut Software.
Trust What Works
April 7, 2011
In applying a universal fiduciary standard to brokers, don't break what already works.
Nasdaq: We'll Lead With Speed
April 1, 2011
Nasdaq OMX will keep operating all NYSE Euronext exchanges, but on its own INET technology, Executive Vice President Eric Noll told customers this morning in this letter to customers.
A Global Store for Stocks (Without Mergers)
March 24, 2011
It would be absurd to think that the buyer for vegetables for a supermarket chain would go to the corner grocery to stock their shelves, yet this is what we are asking of every institution when it buys in volume using existing trading venues.
Time to Transform Fund Accounting
March 17, 2011
With fast-moving, high-volume electronic markets, there’s a clear need to bring together fund accounting and transaction processing applications into one system.
Fees Will Pay for SEC Budget Hike
March 11, 2011
It is important to note that the SEC's funding request for 2012 request of $1.407 billion – an increase of $264 million over the agency’s current FY 2011 spending authority -- will be fully offset by matching collections of fees on securities transactions, chairman Mary L. Schapiro told a House panel this week.
Brave New World for Trading
March 4, 2011
What comes after prop trading. Sybase's Neil McGovern says one consequence of the Dodd-Frank Wall Street Reform Act could be ... more aggressive trading strategies.
Faceoff in Canada: Six Hurdles to LSE-TMX Merger
February 24, 2011
Instinet director of global trading research Alison Crosthwait reviews the factors in the Investment Canada Act that could block the merger of the operators of the London, Milan, Toronto and Montreal exchanges.
BATS/Chi-X: Lean, Mean, & Global
February 18, 2011
With its purchase of Chi-X Europe, BATS Global Markets may not have achieved the size of the NYSE Euronext-Deutsche Borse combination. But BATS and Chi-X have never let scale stand in their way, ITG analysts say.
What Happened with AXA Will Happen With HFT Firms
February 4, 2011
So much for quant trading being an innocent form of programming that can never do any harm.
Ordering Up An Order System
January 27, 2011
The best order management system handles the most assets, in the most markets, without a hitch, in the fastest possible time.
Keeping Broker Records In The Cloud
January 20, 2011
Broker-dealers caught unaware have paid millions in fines for failure to comply with the Securities and Exchange Commission’s requirements to preserve books and records. But guidance is clear, when putting records in the cloud.
Managing the Risks of Mobile Money Management
January 19, 2011
Almost universally, vendors are claiming their applications are “secure” but supporting claims are at best scarce.
11 Market Structure Trends to Watch in 2011
January 6, 2011
Predictions, in no particular order, for what a pioneer in electronic trading believes will be the most important market structure trends in 2011.
The Practical Impact of Dodd-Frank
December 16, 2010
Investment advisors and broker-dealers will have to walk more than a mile in the other’s shoes, as a result of the oversight rules that will be promulgated as a result of the passage of the Dodd-Frank Wall Street Reform Act.
Defending Against Sledgehammer and Scalpel
December 9, 2010
In Iran and in the WikiLeaks retaliations, organizations have experienced the sledgehammer and the scalpel in terms of cyber assaults. Both are difficult if not impossible to defend against.
Open Source, Hidden Exposure
December 2, 2010
The risk of using open source software. Learning from the Goldman Sachs code case.
Systemic Risk Supervision: Recognizing The Next Bubble
November 15, 2010
My question is simple: Are we sending the Office of Financial Research on a fool’s mission?
Lightweight and Simple Solutions
August 11, 2010
At my firm, we build safeguards into our trading processes and have human oversight of them, important steps for protecting client assets against a Flash Crash.
Track Your Brand. Get Social.
August 4, 2010
From Facebook to Twitter, companies today confront a staggering amount of content and opinions about their brands. As a result, it’s critical for companies to have the necessary tools in place to track what’s being said about them online.
A System for Resolving Conflicts of Interest
July 29, 2010
The Dodd-Frank Wall Street Reform and Consumer Protection Act provides a clear blueprint for how financial markets will operate. Not exactly.
Rethinking Data Infrastructure
July 22, 2010
The Dodd-Frank bill gives birth to an oversight body that will collect the information it believes is needed to guard against risk in the nation’s financial system. The impacts on data systems are huge.
Bracing for a Boom in Whistle-Blowing
July 15, 2010
With President Obama about to sign a financial reform bill, finally passed by Congress, the Securities and Exchange Commission, the securities industry bar, and in-house counsel must prepare for a significant expansion of whistle-blowing activity.
Next Frontier: Global Supervisory Cooperation
July 8, 2010
National reform initiatives are not enough to prevent future crises. We must take a broader, global view.
Back to Block Prints
July 1, 2010
High-frequency trading is here to stay. But the electronic stage is now set for a resurgence of block trades. And more control moving back to the institutional trader.
CEOs: Fix the Plumbing
June 24, 2010
The financial crisis proved the industry's data systems -- its plumbing -- is broken. Call in the CEOs.
Trading Without Limits
June 17, 2010
What do traders want? It’s simple really. They want ways to show on screen all the applications that matter to them. At one time, if possible.
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