Today, firms are dealing with three major issues: regulation, compliance and global economics. None of the three are friendly to brokers and trading firms, and that’s where Justin Llewellyn-Jones, chief operating officer of Fidessa, believes there is opportunity.
Llewellyn-Jones spoke with JLN editor-in-chief Jim Kharouf last month at the IDX conference in London, about how Fidessa is developing new technology that will assist firms in making the trading, risk and account management, and compliance task easier.
“We have that order management system and that global footprint around the global order management system as well,” he said. “But we are also leveraging a lot of liquidity access tools in that space as well, with things like smart order routing, algorithmics, aggregation and so forth.”
Fidessa has scored some large deals over the past two years with more in the pipeline. It also announced the introduction of US Treasuries onto its trading platform in June, which Llewellyn-Jones believes will help expand its derivatives trading software system.
“We started with Citi, Newedge, Nomura,” he said, adding that there are another five deals in the making. “What Fidessa has to offer is resonating more and more in the agency broker, FCM space in the exchange traded world.”
New regulations are pushing firms to adopt technology such as Fidessa’s, which it claims can help in meeting new reporting and compliance requirements in various jurisdictions.
“We’ve always been a workflow, automation, organization,” he said. “And the regulatory environment is very much pushing that electronic workflow, that transparency, electronic audit trail that using different EMS solutions doesn’t provide you. You don’t have that central consolidation point that you need nowadays to meet your compliance and regulatory requirements.”
Fidessa is also concentrating on the middle-office space.
“There’s a lot of activity around things like allocations,” he said. “There’s a lot of interest from FCMs in being able to tack into that real money space as well. So what we’re doing with them is determining what sort of solutions they need to be able to interact with their clients.”
Fidessa is also focusing on access to new venues as well as risk management functions that can help manage a global trading operation.
“At the same time, there is a lot of innovation around the access methodology into those venues. We’re doing a lot of reengineering at the moment of our market access layer ensuring that its performance meets the latency requirements as those improve going forward as well,” he said.
And despite the difficulties that many FCMs are having in terms of regulation and a low-interest rate, low volatility era, Llewellyn-Jones said that firms are increasingly looking to outsource their technology.
“So while the macro-economics and the markets themselves remain very much in flux, clients remain very much in flux, I think things are definitely improving,” Llewellyn-Jones said. “There definitely great conversations going on.”