2015 Outlook: Steve Woodyatt, Object Trading
Steve Woodyatt is CEO of Object Trading, a provider of direct market access (DMA)
What were the major themes of your business in 2014?
Improved transparency between the buy-side and sell-side, and requirements to improve oversight of operational and systemic risks are key drivers of many technology innovations and trends we saw in 2014. Regulatory development and exchange competition have fostered liquidity fragmentation with the continued introduction of new products and trading venues. Market participants have been seeking the most efficient ways to manage their scarce capital under the pressures of increased compliance costs, margin demands, and declined overall trading volumes.
What are your expectations for 2015?
It will be more expensive for firms to stay competitive in 2015. Both buy and sell side firms need to reevaluate their technology projects and examine how much spending is dedicated to business maintenance and if they are investing in areas that will help deliver business growth. Capital efficiency will continue to be the main focus, with the new collateral requirements around OTC derivatives and swaps being just one driver. But we have also witnessed the continued futurization of swaps in 2104, as exchanges introduced new cross-margined products to help participants optimize the consumption of collateral. This trend will inevitably continue in 2015, as will the further rise of the non-bank FCMs, specializing in access to regional markets, and providing bespoke solutions tailored to buy-side firms seeking alpha in emerging markets and asset classes.
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