TARGET2-Securities (T2S) is a new post-trade, delivery-versus-payment settlement system for Europe developed by the European Central Bank (ECB). Settlement using T2S will be less expensive and more flexible than national settlement systems. The ECB’s T2S program includes new settlement logic, new communications protocols, new regulatory requirements and the centralised system service in which European-wide settlements will occur. Allied Testing is a quality assurance (QA) and testing company with special focus on financial systems and capital markets. We have testing staff with the required knowledge and understanding of T2S who will use our T2S-specific libraries and in-house tools to test readiness and compliance for T2S settlement. Working with Allied Testing will reduce the time spent on testing, the cost of the testing, and ensure that systems work as required.
Exchanges are venues where investors wishing to buy a financial instrument find investors wishing to sell. The exchange brings together a buyer or seller to effect a trade. Central, to an exchange is the trading system on which trades are executed.
The Market Quality Dashboard is designed to allow market participants to quantify the economic impact of market design changes on market quality. Market quality is defined by reference to the near universal mandate of regulators, which seeks to ensure that markets are fair and efficient. It therefore follows that, if one intends to change the design of a market place, and get this signed-off by regulators, those changes are evaluated in terms of how they impact fairness and efficiency.
To have information, but to be unable to use it, is a frustration that many businesses experience. Freeing that information, and making it usable alongside other measures, can present real opportunities. Exchange operators and post-trade service providers face rapidly evolving business dynamics and competition. Seizing opportunities is therefore immensely important.
This paper describes the opportunity for market operators to see a fuller picture using the data they already hold.
Market participants are demanding consistency in symbology (naming convention) to minimise investor confusion, promote stability and mitigate operational risks. Internally they need to reduce the costs that stem from duplication of support for multiple vendor symbologies. Currently each exchange has its own data format and symbology, which means that each data feed must be normalised, renamed and consolidated before the data can actually be used. Through the use of symbology users navigate the data available on a specific instrument. Market data vendors provide their own conventions which allow users to cut across individual exchange symbologies but nevertheless are not compatible. Nirvana for trading firms has been a common symbology to ease navigation between market centres and data vendors, providing a better experience for investors whilst reducing back-office complexities. The market has for some time been crying out for a solution which allows them to integrate data from a myriad of sources seamlessly with trading applications, allowing new content to be added quickly whilst eliminating the difficulty in managing symbology changes and feed updates. As this paper will show, the best contender for a common symbology at present is the RIC.
Exchanges are in a bind. Established business lines are squeezed on margins and new revenues are hard to find. Regulators see on-exchange trading as the future and want over-the-counter (OTC) trading to be limited. They also support infrastructure being made as resilient as possible, and to that extent they are supporting market operators, propping up exchange operators who are being squashed between ever decreasing numbers of alternative revenue streams and ever tighter margins as customers push them on price.