SellSide

SEF Trading Stumbles to End the Year BuySide

SEF Trading Stumbles to End the Year

https://tabbforum.com/opinions/sef-trading-stumbles-to-end-the-year/ Colby Jenkins TABB Group - "Taking all of this into account, 2019 was nonetheless an up year for SEF trading (Exhibit 4, below). Compared to total notional volume traded two years ago, notional SEF activity has grown by just under 40%, or roughly $58.15 trillion, since 2017 – primarily driven by the IRD market. With a significant slowdown in IRD SEF trading over the past quarter, though, 2020 is already shaping up to be a year of further departure from the SEF market status-quo."
From too Big to Fail, to too Large to Survive Automation

From too Big to Fail, to too Large to Survive

https://tabbforum.com/opinions/from-too-big-to-fail-to-too-large-to-survive/ Larry Tabb TABB Group - "The trading business is being captured by electronic market makers/liquidity providers, and the short-term risk transfer business is being poached by shorter-term quantitative and specialized hedge funds." ... "If the business isn’t shuttered, it becomes almost impossible to rip out the core processing systems, order management platforms, algorithmic infrastructures, reporting lines and business planning processes to achieve the cost structure and agility needed to succeed. Unfortunately, for most firms, that is what is needed."
The Strange Economics of Exchange Management Data

The Strange Economics of Exchange Management

https://tabbforum.com/opinions/the-strange-economics-of-exchange-management/ Kurt Dew Northeastern University - "The markets are evolving toward a two trading-space system. The first: exchanges trading SEC-regulated publicly held corporate equity and debt; the second: exchanges trading more generic non-SEC-regulated markets." ... "There is a growing opportunity for a new blockbuster exchange to seize the volume going to generic futures and OTC instruments by a single exchange with spot trading capability. But to be successful, this spot market must be at least as efficient as the existing futures markets, reducing trading costs to a minimum, thereby attracting volume."