It goes without saying that it’s imperative for trading technologists to thoroughly test their systems before the put them in a production environment. Clearly, building a market-beating trading platform requires a high level of uptime and a propensity for failure that’s as close to zero as possible. And for years technologists have used a range of tools to test the various components of their trading platforms, across all aspects of the order workflow.
But many modern infrastructure testing tools are, in effect, point solutions that focus on a specific component of the overall picture. In today’s complex, competitive and highly regulated trading environment, this approach is no longer the most efficient way of managing your landscape.
The concept of the trading system as a single management layer is long past its sell-by date. There are multiple trading systems and testing solutions operating within the same environment, which creates a great deal of complexity.
Firms need the ability to operate and control this highly disparate platform. They need the ability to manage and test on an enterprise scale, produce auditability and validation of test results, while at the same time embracing a wide set of testing tools and agents.
But this is easier said than done. Over time, trading operations have become complex networks of different applications using diverse technologies tied together into an overall trading infrastructure.
Testing has evolved in much the same ad hoc way, and as a result firms often lack an over-arching ‘enterprise’ perspective or a coherent testing strategy, relying instead on a multitude of different testing agents, which in turn leads to issues of trading system reliability.
This fragmented approach is not just inefficient, onerous and expensive, but could be detrimental – if not dangerous – in the new regulatory climate. MiFID II requires all trading firms to certify that their algorithms have been tested to ensure that they do not create or contribute to disorderly trading conditions before being deployed in live markets.
Errors can be costly, with the potential repercussions of a trading system failure reaching from serious reputational damage, to increased regulatory scrutiny, significant financial loss, personal repercussions for executives, and even systemic issues for the wider financial markets.
Clearly, a new methodology is needed – one that automates the testing process from end to end, eliminating the cumbersome process of managing multiple testing components across the environment.
The operational benefits of such a solution are obvious. A standardized enterprise-wide approach to testing can improve the availability of reliable and consistent IT performance data, which can be used to help justify capital investments and other ongoing resource requests. It can increase the overall quality of trading operations, reduce costs, and head off potential new regulatory challenges up ahead.
VeriFIX Enterprise by Itiviti is the only testing solution that takes an enterprise approach, validating the complete trading infrastructure. Developed to empower complex enterprise trading environments and deliver immediate benefits in the critical and complex areas of compliance and growth, continuous automation allows functionality to be deployed to production faster, with higher quality and at a lower total cost of ownership.
Trading As discussed in an earlier blog post, convergence of equities and FX markets is spurring some institutions to merge their respective trading operations so as to enjoy economies and leverage successful activities across both asset classes. But for firms taking this route, there are significant challenges. Despite the convergence of FX and equities markets, there […] January 14, 2019
Risk & Compliance MiFID II posed a significant number of challenges for trading firms across Europe, but its regulatory impact has perhaps not been as dramatic as many had anticipated. Although many analysts predicted the imminent failure of smaller market players and potentially serious consequences for firms undertaking systematic internalization, the regulation came into play without creating quite […] January 7, 2019
Trading On December 5th 2018, Itiviti’s Systematic Internaliser solution was named Best New Technology Product – Trading and Execution at 2018 FOW International Awards. In this article, Itiviti’s Jonas Lindqvist explains how Itiviti was already working with clients to identify the opportunities offered by the SI regime on MiFID II’s January 3rd go-live date. In the […] December 17, 2018
Execution Change is nothing new in trading. Since the millennium, sell-side brokers have had to ride waves of transformation in regulation, market structure, technology and economic fundamentals. Survival and success have depended on adaptability and timely adjustment to these increasingly complex market circumstances in terms of organization, business models and technology. The financial crisis of 2008 […] December 10, 2018
By submitting this form, you acknowledge that data collected by us will be handled in accordance with our Privacy Notice.