WS&T Presents the Capital Markets Outlook 2010
Wall Street & Technology editors examine the top 10 trends that will shape the capital markets in the coming year.
Evaluating Outsourcing Options
The technology and capabilities of outsourced portfolio management systems offer functionality that is comparable to their installed counterparts. But not all outsourced solutions are created equal, writes Michael Lobosco, Director of Outsourcing Services, Advent Software.
SOFTWARE AS A SERVICE
Capital Markets to Broaden Use of Hosted Software in 2010
CHALLENGE: Still-tight budgets and small IT staffs will drive Wall Street firms' preference for renting software rather than buying it.
Industry Aims to Secure Cloud
CHALLENGE: The obstacle to large financial firms' use of public clouds has been security, but industry groups and vendors are working to fix this. And internal clouds, protected within a firm's own firewalls, are under construction.
High-Frequency Trading Controversy Continues to Swirl
CHALLENGE: Regulators are scrutinizing the surge in high-frequency trading strategies, which account for more than 60 percent of equities executions by some estimates. Charges of unfair access likely will continue to drive the HFT controversy in 2010.
Dark Pools Seek Limited Transparency
CHALLENGE: Dark pools provide investors with a valuable venue for trading large blocks of securities, but regulations may change the way market participants interact with anonymous trading venues in 2010.
HEDGE FUND AUTOMATION
Investors Demand Hedge Fund Transparency
CHALLENGE: Institutional investors are already demanding more transparency from hedge funds. Not to be outdone, regulators are readying new rules for hedge fund reporting.
No Country for Old Risk Models
CHALLENGE: Congress, economists and taxpayers agree on one thing: Large financial firms cannot continue to make large, risky bets (on highly leveraged subprime-related CDOs and CDSs, for example) and expect a government bailout. Survival in 2010 will hinge on taking risk management processes and technology more seriously.
Data Projects to Pave the Way for Business Intelligence
CHALLENGE: Business intelligence tools can deliver decision-making insight to areas on Wall Street that sorely need it, such as portfolio and risk management. The catch? Data has to be clean, accurate and organized (if not integrated), which means firms' shelved enterprise data management projects may get resurrected.
OTC DERIVATIVES CLEARING
Derivatives Clearing Gives Congress Fits
CHALLENGE: Congress is working on legislation for OTC derivatives reform, but there is still no agreement on mandatory clearing of standardized instruments or on how exotic instruments will be handled.
New Regulatory Requirements Require Data On-Demand
CHALLENGE: With a plethora of proposed regulations in the pipeline, financial services firms are facing more strenuous audits and data reporting requirements that could result in penalties if firms get them wrong.
Social Networking Is Here to Stay
CHALLENGE: Social networking technology is changing the way consumers, investors and traders interact and share information. However, all companies are struggling to find ways to show how the trend is actually adding to the bottom line.
FROM THE EDITOR
2010 Technology Forecast Is Anyone's Best Guess
With the economy sending mixed signals, predicting how capital markets firms will spend their technology dollars is a difficult, though not impossible, task.
CME Group Thrives on Technology Innovation
As the operator of the Chicago Mercantile and other exchanges, CME Group's competitive advantage increasingly is built on technology innovation.
Dynamics of Technology Economy Are Key to Mastering Balance of Expense and Value
Companies that take charge of their internal technology economy microclimates today by balancing quantitative and qualitative analysis will be in the best position to leverage technology for extreme competitive advantage.
How Wall Street's Gearing Up for Carbon Credit Trading
A flood of U.S. firms have streamed into Europe's carbon credit trading system; in this and other ways firms are forging ahead under the assumption that the Senate will pass a climate change bill that creates a market for trading carbon credits.
Currensee Offers Facebook-Like Community to Lonely Foreign Exchange Traders
Providing foreign exchange support by letting forex investors find like-minded traders and compare notes as well as execute trades.
Wall Street's Quants Feel Misunderstood
Buck themselves up by saying, "I'm good enough, I'm smart enough, and gosh darn it, people like me!"
NYSE to Shine Flashlight on Dark Pools
Goldman Sachs, Getco, Barclays Capital, Knight, and UBS have all agreed to "print" dark pool trades to NYSE Euronext's Trade Reporting Facility.
Scottrade Fined $600,000 for Failing to Monitor Transactions
This could happen to you -- FINRA told the online brokerage that having compliance officers look for suspicious activity is not enough, software monitoring is necessary.
FINRA To Focus on Fraud and Facebook
The Wall Street regulator has redefined its priorities, and fraud detection and social networking are two prominent ones.
Regulators Urge Financial Firms to Get Risk Data in Order
Mergers and acquisitions have created a hodgepodge of databases that need to be integrated and normalized, a report finds.
CFA Institute Sends Letter on OTC Derivatives Reform to Congress
Standardized derivatives should trade on regulated exchanges and clear centrally, states CFA's letter, based on IWG report.
Mutual Funds and Cost Basis Compliance: Plan Now to be Prepared in 2012
The fund industry's procrastination in implementing cost basis reporting systems may have a dramatic impact on investor satisfaction over the long-term.
Prognosticating About 2010 and the Magic 8-Ball
Regulatory changes, electronic trading solutions and international policy will dominate 2010. How so? 'Reply hazy, try again.'