10 Feb 2012, Sybase, Asia Risk
The financial market is braced for a swath of new regulation, from a Group of 20 (G-20) obligation to clear standardised derivatives through central counterparties, to revised capital and liquidity requirements under Basel III.
In addition, regulators are determined to increase transparency in the market, and are putting in place strict pre- and post-trade reporting requirements.
The various rules will put huge technology demands on all market participants, with many needing risk management systems upgrades and enhanced analytics and reporting software.
Electronic trading is also playing an increasingly important role in financial markets – particularly given the G-20 requirement that standardised over-the-counter derivatives should trade on exchanges or electronic trading platforms. The Dodd-Frank Act in the US contains an explicit trading requirement via its swap execution facility rules, and the revised version of the Markets in Financial Instruments Directive in the European Union is expected to take a similar approach.
Even without regulation, however, electronic trading volumes have increased in cash equity and foreign exchange markets, driven by an array of algorithmic and high-frequency trading firms. Increasingly, being able to react quickly to market events means the difference between a profit and a loss.
In the first part of this sponsored interview, Neil McGovern, senior director of product marketing at Sybase, discusses new regulation, the growth of electronic trading, and the use of complex event processing (CEP) technology.
In the second part (21:30), Horace Chow, vice-president and general manager, North Asia region at Sybase, discusses how clients are responding to the challenges, and identifies some of the key trends in Asia.
Questions in part 1 of the interview include:
Questions in part 2 include: