Itiviti introduces Market Structure Strategy group led by Christer Wennerberg
Providing customers with an arsenal of new functionalities and flexibilities is one of the goals of the recently created Market Structure Strategy group at Itiviti. Led by former SEB Bank’s CTO, Christer Wennerberg, and with former Nasdaq OMX’s Head of Development in Stockholm, Magnus Hedin, the team is dedicated to helping Itiviti clients meet regulatory demands and thrive in a new landscape.
With the recent publication of ESMA’s Regulatory Technical Standards, Christer Wennerberg answered questions about MiFID II and what market participants can expect as regulatory requirements become implemented.
“I don’t think anyone can say MiFID II does not include enough. On the contrary, I think that some of the regulation is too detailed, or too extensive, without adding extra value.”
Wennerberg brings up the Double Volume Caps mechanism, which limits trading volume in a given stock on a given venue to 4% of total volume on organized venues, and limits total trading across all venues for a given stock to 8%.
“I believe this will be counterproductive and damage liquidity,” he said.
Another example where he believes regulation may be too restrictive is in addressing firms that engage in algorithmic trading and market making. According to MiFID II, these firms are required to enter into market maker agreements with the operator of the venue.
“This will probably lead to some firms, that post liquidity, ceasing their liquidity provision engagements,” said Wennerberg. “The operational costs in general and the compliance costs will increase significantly. This might lead to consolidation in the market, which was probably not the intention of the regulators.”
While regulation may seem stifling, Wennerberg is optimistic about innovative solutions and technologies on the horizon to help customers navigate this new environment.
“The new regulation landscape will lead to direct effects when participants are adapting to the rules. However, one should not forget the indirect effects of innovation. One example is the BATS new innovative continuous auction, which may reduce the negative effects of the Double Volume Caps mechanism,” said Wennerberg.
He also believes a flexible and high-performance platform will make it possible to adapt to new ways of trading.
“A misconception often heard is that ultra-low latency is only for high-frequency trading. Nothing can be more wrong. Today’s highly fragmented trading, with an ever increasing level of automation, needs extreme performance in order to buy time to make smart decisions. This also stands true for high-touch trading. Apart from flexibility and performance, functionality is key.”
Click here to read the full interview article with Christer Wennerberg.
Risk & Compliance Roughly six months after the introduction of MiFID II, Johannes Frey-Skött – VP Apps Engineering, Itiviti – talks to The TRADE about the short-term impact of the regulation on European market players, looking at both the positive and negative effects witnessed so far. He also outlines current pain points in MiFID II compliance and the […] July 17, 2018
Risk & Compliance With the pressure of initial implementation now a distant memory, MiFID II-regulated firms are turning their attention to the real work required to create sustainable long-term solutions. For many, the race to meet the January 3 deadline meant implementing temporary compliance processes that were far from perfect. Unless updated and improved, these could lead to […] July 10, 2018
Risk & Compliance What happens when one of the top 10 active brokers in Canada is confronted with: Stringent risk control requirements for electronic trading Time-to-market imperative to supersede TMX’ monitoring service termination Need to consolidate 14 internal trading platforms into a central gateway for enterprise-level risk management Optimization of latency and access speed for client connectivity Download […] June 26, 2018
Execution Following the merger between Itiviti and ULLINK in March 2018, Richard Bentley – Chief Product Officer of the combined company – talks to The TRADE about the new company at IDX London 2018. On the agenda: the rationale behind the merger, the company’s individual and combined strengths, product strategy going forward, key priorities for the […] June 11, 2018
By submitting this form, you acknowledge that data collected by us will be handled in accordance with our Privacy Notice.