Two weeks ago, several of the global Broadway team were lucky enough to attend one of our first in-person conferences in almost two years: The Fixed Income Leaders Summit. And it’s fair to say, we are all still buzzing from a fantastic few days in London. It was a packed and informative agenda with lively debate and ample opportunity to network with our global clients and industry peers and enjoy many long-overdue catch-ups. And our very own Michael Chin, CEO of Broadway, participated on the “Automation 2.0” panel on day two of the conference, driving a lively discussion on advanced fixed income automation and how market participants can leverage algos, direct connectivity and trading workflow automation to enhance execution quality and free up trader’s time to focus on complex orders, leaving us all excited for things to come.
With so many subjects covered I can’t do them all justice in one blog, but here are a few of my key takeaways on several subjects I keenly follow:
Data Revolution and Integration
How we use data has undergone significant developments in the past year, with investment managers allocating most of their resources to data ingestion, aggregation and distribution across a wide range of use cases this year. It’s clear that the use of cloud computing, AI and machine learning will enable billions of data points to connect and therefore paint a more accurate picture of liquidity. As such, there’s a growing need to recruit data analysts and quants on the desks as traders recognize the benefits of using quant data to inform their SORs and maximize execution.
Consolidated Tape in Europe
There’s a consensus that a consolidated tape in Europe would make buy-side firms more comfortable to provide liquidity and lead to more peer-to-peer trading. Plus, investment managers are using data to integrate portfolio management and trading, which includes assessing the feasibility of execution and performing TCA analysis. However, the discussions about emulating “TRACE “in Europe are ongoing because the sources are currently greatly dispersed and subject to expensive fees.
As expected, there was notable excitement surrounding the expected growth of sustainable investing – not just over the next 12 months but over the coming decades. Regulation such as the European Union’s Finance Disclosure Regulation (SFDR) is having a big impact in driving ESG forward at pace (the fact that the last Green Gilt was 10 times oversubscribed was given as an example of the massive uptake). Alongside performance targets and risk metrics, sustainability has now been added as a 3rd pillar. Trading desks will have to provide clients with information around their ESG footprint, although the data required to do this is still scarce and in its infancy. This will put data scientists into even further demand as firms will need to gather data from many different sources.
I’ll be back to you with more observations from live events as business slowly but surely (here’s hoping!) returns to normal. Thank you again to the FILS organizers for a wonderful event.