Outlook 2018: Alastair Hawker, Quantitative Brokers
Alastair Hawker is head of North American sales at Quantitative Brokers.
Which hot topics/hype should be retired?
Bitcoin. While I don’t think this topic will be going away next year, a little less hysteria is overdue. Evaluation of the digital asset and the new derivative contracts on it must be made by the industry without a rush to judgment (positive or negative). MiFID II. I think most people will be glad to see January 3, 2018, behind them. The question is whether all will be completed or will there be a lingering overhang of issues or other subsequent work to deal with for many months into 2018. The fact remains that MiFID II has been enormously resource-consuming for the industry on both sides of the Atlantic despite it being an EU regulation.
What changes do you expect to see in regards to artificial intelligence in 2018?
As a firm, we have spent a lot of time researching and discussing AI/machine learning this year. Undoubtedly, it’s a huge area that will continue to grow and become part of everything in the industry. The next step will be better understanding the applications and limitations of AI/machine learning, and there will be a move away from it being a buzzword to being able to develop true use cases.
What do you expect to be the skill sets most in demand in 2018?
Demand for quants and highly skilled technologists is relentless in our industry – this will continue in 2018. I also think there will be a continued convergence of these skills into sales, trading and portfolio management roles.
Which market structure changes should take place in 2018?
US Cash Treasuries. This massive and critically important market still has a lot of potential for modernization. The pace of change is slow and the contrast with other asset classes is stark (e.g. compare with Treasury futures). It’s hard to say how much will change in 2018 – that may depend on the success of new entrants to the electronic marketplace. However, I will make a prediction that 2028 will not look anything like the current market structure.
The Bitcoin ETN futures are based on ETC Group’s physical Bitcoin ETN.
Gensler suggests Bitcoin ETF filings limited to CME-traded futures would be welcomed by SEC.
It is hoped that BNY Mellon will provide transfer agency and ETF services when the fund converts to an ETF.
Increase in institutional demand highlights growing legitimation of bitcoin.
There has been more institutional volume than anticipated.