EMERGING TRENDS IN MULTI-ASSET TRADING SYSTEMS

Tokyo, New York, London, Paris & Aix en Provence, January 26th, 2012 smartTrade Technologies, today announced the release of a white paper and podcast discussing workable approaches to implementing multi-asset and cross-asset trading systems.

There has been widespread change in the global capital markets in the last few years, and it has had significant effects on banks’ trading platforms. Banks must provide trading platforms that can access the global financial markets, manage increasingly complex transactions involving multiple asset classes, and handle a range of protocols and market structures that are constantly evolving. Add to this the requirements to respond to evolving regulatory mandates, client demands for increased functionality and transparency, and increasing volumes and volatility; and it is clear that sell-side banks face a new, challenging trading terrain where they must quickly react to changing markets in order to remain competitive. Institutional dealing is extending globally with more liquidity sources to manage, and involves more and more disparate counterparties. This creates the need to aggregate liquidity, create orders, and deal or trade faster with clear market views in a fast moving trading environment. The stakes are higher. Buyside clients demand transparency and best execution even while trading larger volumes in more volatile markets across various market structures and across multiple asset classes.

Siloed trading operations are becoming less and less optimal in this new environment. Clients want sell-side banks to support complex trades, often involving multiple legs in multiple asset classes. These trades may include instruments traded in more than one geographic region, in more than one time zone, and with multiple settlement arrangements. To compete in this kind of trading environment, sell-side banks need harmonized trading systems that enable deeper and richer cross-asset functionality. In addition, now need systems that can monitor risk more holistically and in real time across client accounts with diverse holdings. The pressure for sell-side banks to more transparently manage exposure across all business comes from both regulators and banks’ own risk management mandates, both of which continue to evolve.

smartTrade’s white paper “Meeting Multi-Asset Trading Challenges: Workable Approaches for Success in a Dynamic Capital Markets Arena” describes practical approaches for implementing a multi-asset dealing infrastructure.

In addition, smartTrade’s Harry Gozlan was interviewed by Candyce Edelen of PropelGrowth. In this interview, they discussed the emerging trends in cross asset trading.In the interview, Harry Gozlan points out that buyside demand, particularly from hedge funds have driven the evolution of cross-asset trading. Hedge funds asked for a “single access point to multiple assets to do cross-asset trades, either through auto-hedged securities, cash against futures, basis trades,” or other combinations. Gozlan points out that traditionally, banks have maintained “siloed FX, equities and rates systems assembling a single entry point to all these assets to provide a kind of cross-asset service to clients.”

About smartTrade Founded in 1999, smartTrade provides sophisticated liquidity management systems, enabling banks to develop multi-asset dealing platforms that aggregate liquidity from dozens of sources to create a single order book, distribute customized pricing to clients, receive and manage client order flow, internalize liquidity and/or route it to external venues while managing state throughout the order lifecycle, implement smart order routing and proprietary algorithms, and connect electronically to any number of venues regardless of messaging protocols. The system handles multiple asset classes and is in production globally supporting foreign exchange, fixed income, equities, rates, and many other instrument types.