Collaboration provides market participants with European market quality metrics free of charge Plato Partnership, the not-for-profit company working to improve the European equities marketplace, and BMLL Technologies, the data engineering and analytics firm, today announced the launch of Platometrics, a new market quality metrics tool. Platometrics is the first service of its kind, providing market participants with a complete picture of trading data and trends from European venues, entirely free of charge. Platometrics provides users with: A consolidated overview of liquidity from across Lit, Dark/Grey, Bilateral and Non-Addressable trades; The European best bid offer (EBBO) across exchanges at any specific point in time; and A range of market quality metrics on a large range of instruments for individual stock analysis and by venues for performance comparison purposes including (but not limited to) market impact, intraday volatility, order fill rates, average resting time of orders, percentage presence time at EBBO and trade-order ratio. All metrics are available on a transaction date plus one day basis (i.e. up to the end of the prior trading day) with up to six months of historical data. The metrics cover European equities and equity like instruments, including Shares, ETFs, DRs, and Certificates. On one intuitive interface, users can view consolidated data from across Europe or drill down to explore multiple metrics by market, venue or specific security. Access to Platometrics is free to all market participants, from portfolio managers, traders, compliance analysts and risk managers, to quant researchers, regulators and academics. Signup and access is via an online dashboard. The scope of Platometrics is extensive, from helping firms improve best execution and understand liquidity sourcing and price forming dynamics, to analysing market quality and informing policy and strategy discussions. Its launch marks another milestone in Plato’s mission to bring much needed innovation to the European marketplace and all its participants. Mike Bellaro, CEO of Plato Partnership, said: ”Plato Partnership is committed to giving something back to the marketplace, and Platometrics will open a wide range of information to market participants who were previously locked out by impenetrable complexity of data and high costs.” “Whilst trading data from different venues is available, it is disparate and spread across multiple platforms for different exchanges and regions. This makes it challenging to compare and assess disparities and variations between different parts of the marketplace. Platometrics offers the first viable solution to this market-wide challenge, and we are delighted to be able to offer this tool to all participants, free of charge.” Johannes Sulzberger, CEO of BMLL Technologies said: “BMLL is very excited to be collaborating with the Plato Partnership, bringing clarity and insight into the complexity of European markets for the first time. Platometrics represents a step-change in the analytics deployed within Europe and we are pleased to be able to provide simple answers to the core challenges faced by market participants, namely; addressable liquidity, cross-venue price formation and execution quality.” “BMLL provides the data, analytics & compute to be the single source of truth around the consolidated European liquidity landscape, the consolidated best price across venues and execution metrics for different venues and securities.”

Henry Umney, CEO of ClusterSeven, offers his views on the regulatory, business and risk management trends in the banking and financial services industry for 2020:

Modelling will become central to commercial operations, making model risk management a constant business theme

With all-round, general uncertainties in the geo-political landscape – trade wars, Brexit, Middle East tensions, etc. – these events are likely to cast a shadow over the global economy. Reports signal a slowdown in growth, which will increase pressure on yield.

Business operations will increasingly look to their modelling teams to seek opportunities outside of its traditional remit, placing a heavy reliance on this niche function. Alongside this, with the availability of advanced machine learning/artificial intelligence-led tools, firms will look to leverage them to gain operational efficiencies, which again will place a reliance on technical staff who are familiar with these technologies. Firms seek to embrace the phenomenal computing power that technology offers but need to be weary of how these modelling tools are utilised. Most people’s smart phone today is 100,000 times more powerful than the command module on Apollo 11! It is easy to underestimate how powerful and uncontrolled this computing power can be.

The multifaceted economic, business and technological complexity (together with the latter’s widespread access and unprecedented computing power) will create the perfect storm, greatly increasing the risk of modelling errors, which potentially could have crippling commercial and regulatory consequences. This will make model risk management a constant theme as firms take concrete measures to pre-empt commercially impacting errors and evidence best practice model management to auditors and regulators.

The Bank of England’s Operational Resilience initiative will enforce a joined-up approach to regulation

The Operational Resilience (OpRes) initiative, jointly driven by the Bank of England, the Prudential Regulation Authority (PRA) and the Financial Conduct Authority (FCA); is demanding demonstrable operational resilience of every conceivable aspect of business across firms’ operation. This is in addition to the abundance of individual regulations that already exist.

The PRA is already asking firms to respond to their organisation’s Board’s awareness of the operational resilience status, even though the OpRes programme is likely to only take effect in Q2 2020. OpRes draws together several themes and represents a drive for higher ethical and commercial standards in business that haven’t been asked of firms before. The wide and non-prescriptive scope of OpRes will force financial institutions to take a joined-up and all-encompassing view to regulation, markedly moving away from a siloed approach that commonly exists today.

The UK’s Senior Managers & Certification Regime will go overseas

The FCA’s Senior Managers & Certification Regime (SM&CR) – the first of its kind in the world and potentially the strongest regulation of people in business thus far – has become the cornerstone of UK regulation, with its focus on enforcing individual accountability for senior executives in the banking and insurance sectors. As of 09 December 2019, all UK firms solely regulated by the FCA will need to adhere to the SM&CR. Following its success in driving a shift in mindset towards proactive and responsible governance in the UK, 2020 will see other countries adapting the regulation for a similar cultural shift in approach and attitude. Already, countries including Australia, Canada, Singapore and Ireland are considering ‘light’ implementation of the regulation, which will become more embedded in regulatory programmes in 2020 in these regions.

Author: Yash Hirani

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