Regulation

Conversation with Paul Rowady, Director of Research, Alphacution Research Conservatory

What is Alphacution?

Alphacution is the first digitally-oriented research and strategic advisory platform focused on developing a centralized "market intelligence asset" by modeling, measuring, and benchmarking technology spending patterns, and the operational impacts of those investment decisions. The Alphacution platform is specifically designed to deliver an empirical and quantitatively-backed perspective on the effect of financial services industry spending for an institutional client network.

On 8th May 2018, CPMI-IOSCO released anonymised updates on the three critical risk areas where central clearing houses are scrambling to meet the business and regulatory demands as set forth in the 2014 Principles for Financial Market Infrastructures (‘PFMIs’). These three are recovery, coverage of financial resources, and liquidity stress testing.

Every June, the Bank for International Settlements (‘BIS’) publishes one of the most influential texts for finance, its annual report. It covers the bank’s own activities, to be sure; but critically for all other actors, it sets forth the content and direction of high-level, central bank thinking on their plans.

This year, two elements were pre-published, which is unusual. This may indicate a particular need felt to inform the market on both progress and planning for macroprudential regulation, mainly of banks, but not only; and to comment also on the crypto-currencies vogue, and the problems arising from them – not least environmental given the need for enormous computing power required of distributed ledgers.

Conversation with Justin Schack, Partner and Head of Market Structure, Rosenblatt Securities

Rosenblatt is a boutique securities firm based in New York whose core business is institutional brokerage in US equities. Its roots are on the floor of the New York Stock Exchange, where it pioneered in offering asset managers direct access to NYSE trading during the 1980s. Today, it is the biggest broker on the NYSE floor, offering clients services unique to floor brokers, such as greater flexibility when participating in the closing auction. Rosenblatt also serves the buy side through its upstairs desk, which specialises in portfolio trades for quantitative asset managers as well as single-stock execution.

The data IOSCO gathered from its members last year made it clear that individual investors continue to be serious buyers of complex, leveraged OTC products. If there were not a genuine world-wide investor protection problem, IOSCO would hardly have bothered to write extensively on the state and extent of the question, prepared suggestions for national capital markets regulators, and submitted those to public review before endorsing final recommendations.

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