Ahead of the EMEA Trading Conference, Jim Kaye FIX Executive Director highlights key themes in electronic trading:
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Artificial Intelligence (AI): AI has gained significant attention recently, especially in trading. While generative AI has not yet directly impacted trading, it has been used for productivity tools and decision support. The importance of high-quality data is emphasized, as AI tools need well-maintained data to be effective. AI can help identify data inconsistencies and aid in their correction.
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Operational Resilience: Regulatory bodies are increasing focus on managing operational risk, with DORA being a notable regulation. One key issue is outage communication across market infrastructures and participants. Another area of focus is algorithm testing, ensuring they are tested to avoid market disruptions and react properly to third-party issues.
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Post-Trade Processing: The T+1 migration in North America has been successful, with a similar deadline set for the UK and EU by 2027. There is an emphasis on reducing manual processing in middle office operations and improving real-time processing with electronic communication and consistent workflows. The electronification of securities lending is also highlighted as a key area for improvement.
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MiFIR and European Consolidated Tapes: In 2025, European consolidated tapes will become a reality, with a focus on data standards for moving data and ensuring transparency. FIX’s work on defining liquidity, trade flag usage, and reporting logic is vital to maximizing the benefits of these tapes.
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The Green Transition: FIX is collaborating with OASIS to develop standards for energy trading in the US and aims to expand this to carbon emissions trading. Establishing early standards for these markets will help streamline trading of these instruments.
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Other Innovations: The article also touches on ongoing efforts to automate primary issuance processes, develop tokenized securities, and evolve market technologies.
Overall, the FIX Trading Community is actively involved in shaping the future of financial markets, collaborating with industry bodies and welcoming engagement from those interested in these developments.