Author Archives: Donna Bales

Taking Stock of the Regulatory Sandbox

The concept of the regulatory sandbox (“Sandbox”) was first introduced over 4 years ago by the UK Financial Conduct Authority (“FCA”) to offer: “a safe space in which businesses can test innovative products, services, business models and delivery mechanisms without immediately incurring all the normal regulatory consequences of pilot activities.”…

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Market Structure Impediments May Limit Regtech Potential

The use of technology to create process efficiencies and enhanced user experiences has been fully entrenched in the financial services sector for some time.  In recent years, the pace of change has quickened with the introduction of a kaleidoscope of new technologies such as data analytics, cloud computing, blockchain, machine…

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Using Blockchain to Solve Regulatory and Compliance Requirements

Distributed ledger technologies have the potential to change the current financial system, whether in terms of reduced costs, greater reliability or more transparency. To create a successful ecosystem, it is necessary to have, or have access to, the right ingredients for success. These includes: suitable user cases, the talent to…

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Regulatory Sandboxes Come in all Shapes and Sizes

The digital wave is hitting the financial service industry at an extraordinary rate creating opportunities but also challenges for the financial services ecosystem. Consumers have higher expectations and want better access, transparency and delivery options. New technologies such as blockchain are unravelling traditional workflows and have the potential to represent…

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Off the Hook or Time to Prepare? Canada’s Derivative Clearing Rules Close to Final

In February, the Canadian Securities Administrators (CSA) published a revision to National Instrument 94-101 Mandatory Central Counterparty Clearing of Derivatives (proposed clearing rule) for a 90-day comment period. This proposed clearing rule sets out when certain over-the counter (OTC) derivatives are required to be cleared through a recognized or exempt…

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Best Execution in an Increasingly Complex Market

Several regulators around the world are revisiting their rules and guidelines for Best Execution. This white paper is intended to provide an overview of best execution in Canada and other jurisdictions, and the ways in which best execution is evolving as the Canadian markets continue to grow in complexity. It…

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Canada Drives the LEI Mandate Forward

Due to the size of the Canadian marketplace, the country’s regulators typically rely on other jurisdictions to take a leading role when it comes to global regulatory initiatives. Canada often provides leadership through its input in the early stages of regulatory reform through its participation in international committees and by…

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It’s Time to Get Cracking: The Clock is Ticking for Derivative Dealers in Canada

With the dawn of a new year, Derivative Dealers operating in Canada woke up to the fact that they must quickly get up to speed on two new Rules released by the Canadian Securities Administrations (CSA) ‘Committee’. The ‘Committee’ not only released its Proposal on Central Counterparty Clearing of Derivatives…

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Summary of the Recent Consultation Paper on Draft Regulations for Reporting of Derivative Contracts – Singapore

The Monetary Authority of Singapore released a consultation paper late last month on their proposed regulations for OTC derivative reporting.  The key points have been summarized in the table below. Points of note are that Singapore will require collateral information to be reported and that both parties to a trade…

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One Small Step for Provincial and Model Rules, One Giant Leap for Trade Reporting and Product Determination

Last week, the Canadian Securities Administration (CSA) ‘Committee’ published two consultation papers that contain the proposed provincial rules and updated model rules for the reporting of derivatives transactions to trade repositories (TRs). The updated model rules clarify and tighten their policy stance yet do not deviate significantly from the proposed…

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Innovation Trumps Complacency – SEF Rules Level The Playing Field in OTC Derivative Reform

Recently, a client asked us what we thought were the three most important factors that would contribute to the success of an electronic venue. It turns out that this was a timely and relevant question given the release of the final rules on swap execution facilities (SEFs). While these rules…

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Finding their Feet in the Fog: Central Reporting Gone Adrift – Part II

The article is a follow up from my December blog titled: Getting Lost in Translation: Central Reporting Gone Adrift. http://balmoraladvisorygroup.com/blog/?p=229 My concerns regarding regulatory readiness for the central reporting obligation mandated by the OTC derivative reform were validated this week when CFTC Commissioner Scott O’Malia spoke at a Sifma seminar…

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Keeping Calm and Carrying On: Top 10 Newsworthy Events in Asia of 2012

With 2012 just behind us, it is important to recognize there are two sides to the story of this past year in the markets. On the one hand, no one will dispute that it has been a very difficult year. Trading volumes are down, broker dealers are being challenged to…

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Getting Lost in Translation: Central Reporting Gone Adrift

Over the course of this year, I have often wondered if the G20 leaders who met in Pittsburgh in 2009, discussed the state of the global OTC derivatives market and proposed sweeping reforms truly understood the scope and complexity of this undertaking. In their quest to make the world of…

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Market Integrity Rules Take Over Down Under

Later last year, Australian brokers opened a surprise early Christmas gift: an invoice for a new financial levy to recover the costs of moving market supervision from the Australian Stock Exchange to the Australian Securities Investment Commission (ASIC). This year, they have unwrapped yet another gift from ASIC: new market…

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CollegeHill Asia Paves the Way for WFE Meeting Success in Taipei

Balmoral Advisory’s public relations partner, College Hill, has continued to support the international media relations of the global exchange industry. In October, its Hong Kong-based team worked closely with industry body World Federation of Exchanges to support the 52nd General Assembly and Annual Meeting in Taipei, Taiwan. With 2012 being…

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Breaking Through the Clouds: The Launch of NASDAQ OMX’s FinQloud

NASDAQ OMX’s new product FinQloud has all of the ingredients to be an industry game-changer. It is relevant, timely and innovative. NASDAQ OMX has taken the burdensome task of regulatory compliance and added a sexy twist to it by teaming up with Amazon to provide its customers with a secure,…

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Moving Fast and Slow: Update on Multi-Asset Trading Technology Solutions

Last month, I had the privilege of moderating a panel discussion at the FPL Conference in Singapore. The panel consisted of experts from both the buy and sell sides exploring a timely and relevant topic: “Is Multi-Asset Trading Realistic?” It was apparent from the discussion that both the buy and…

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Ready SET Go!: A Strong Start for the Thai Stock Exchange

As I reviewed the Thai Stock Exchange (SET) 2011 Annual Report on-line, the first words that caught my attention were “Driving to Success”. These three words encapsulate a view that I have developed regarding the SET over the last year. Although the Exchange has faced overseas economic challenges, a flood…

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Shifting the Focus to the Little Guy: Update on OTC Derivative Reform

True to their word, the Monetary Authority of Singapore (MAS) continues to slowly piece together their plans for OTC derivative reform. Their latest installment was released in early August when they issued the second round of feedback from market participants. This response focuses on the central clearing and reporting of…

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Looking Beyond the Obvious: Opportunities in the ASEAN Region

There is a lot of focus around the world on China. Recently, I heard a report that wine producers in Europe are looking to China for quick sale and that Barrick Gold is looking to sell their South African assets to China National Gold Group. The IMF has forecasted China’s…

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These are Testing Times: The “Rush” to Stay Competitive

As we move into the second half of 2012, global regulators continue to aggressively push ahead with their plans to improve regulation and supervision of over-the-counter (OTC) derivative markets. We are also seeing moves by global regulators to impose transaction tax and fee levies on high frequency trading. Market participants…

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It’s Still up For Grabs: Market Dominance in Enterprise Data Management Services

At the beginning of this year, I made some predictions for 2012 in an article in my inaugural newsletter entitled: Balmoral Advisory’s Vision for 2012. One of these predictions was that data management, particularly in the market data vendor space, would dominate headlines this year. This definitely has been a…

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Strengthening Competition Through Co-operation: The Pan-Sino Peninsula Market

Few would have missed the conclusion of the latest merger attempt that saw the Hong Kong Exchange and Clearing (HKEx) gain shareholder approval of its £1.3billion bid for the London Metals Exchange (LME). However, what may have slipped your radar was the recent announcement of a joint venture between the…

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Rising Expectations, Diminishing Returns: The Closure of chi-east

Even though it was unfortunate that chi-east folded, market participants in Asia were not surprised at its demise. Most would agree that the concept of a multi-regional dark pool with cost efficiencies such as central clearing made a lot of sense. In practice, this is difficult to achieve in a…

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Creating a More Flexible Landscape: Market Developments in Japan

If you take a look at the trend in market share for alternative venues operating in Japan, growth has been relatively flat in the last six months.  Apart from a spike in trading turnover on SBI Japannext in May, Chi-X and SBI Japannext continue to share approximately 5% of the…

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Taking It Step By Step: Developments at the Monetary Authority of Singapore on OTC Derivative Reform

Last month, the Monetary Authority of Singapore (MAS) released their response to feedback following a consultation period with market participants on the regulation of over-the-counter (OTC) derivatives. This paper followed their proposal that was released in February. The response marks another step towards finalizing the changes needed to the Securities…

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Timing and Momentum are Everything: Launching the ASEAN Link

In April 2011, there was a formal announcement of the ASEAN link, a collaboration among seven ASEAN countries who are committed to promoting the ASEAN region through freer flow of capital and greater harmonization of their equity markets. Sungard was later named as their technology partner. The intention behind the…

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Carving Out their own Path for Change: Status of OTC Derivative Reform In Australia

The Council of Financial Regulators in Australia broke their silence last week and introduced their policy proposals for meeting the G20 objectives to reduce systemic risk in the ‘over-the-counter’ (OTC) derivative market. We have become accustomed to Australia taking the lead in the Asia-Pacific region with regulatory change so their…

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Something to Talk About: A Much Needed Boost: Positive Product Development in April

Right now, it feels like the global market place is knee deep in regulation but for emerging markets, regulation is nothing new. Many smaller markets will ‘protect’ their local market by using regulation and trading restrictions to quell outside interest until their domestic market matures. In fact, some of the…

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Slowing Down the Speed of Profitability: Regulators Attempt to “Control” High Frequency Trading (HFT)

I came across an article in Business Week about a new transatlantic fibre optic line that will connect financial markets in London and New York at record transmission speeds. When it opens for service in 2013, ‘Project Express’ will be the fastest cable across the Atlantic; reducing the time it…

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Finding the Missing Link: HKEx Announces Details of Technology Upgrades

The Hong Kong Stock Exchange (HKEx) released a spate of news in March that showed signs that they are getting their “house in order” with a combination of humility and boldness. Earlier this month, HKEx announced the results of its industry consultation and review of clearinghouse risk management procedures. Refreshingly,…

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Do you Dig It?: Thomson Reuters Announces a New Digital Data Product

In my blog post “Balmoral Advisory’s Vision for 2012, I mentioned that one of the dominant themes for 2012 would be data management. Last month, I wrote about Bloomberg’s re-design of their market data service in my blog post: A Leopard Can Change its Spots: Bloomberg Moves Towards Openness. Just…

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Singing Its Own Tune: Singapore’s Proposed OTC Derivative Reform

In February, the Monetary Authority of Singapore released their consultation paper on over-the-counter (OTC) derivative reform. At first glance, the proposed reform may appear soft and flexible compared to the hard and rigid structures taking shape in the West. However, when you consider their proposal in the context of the…

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A Leopard Can Change its Spots: Bloomberg Moves Toward Openness

Bloomberg is renowned for its inflexible cost structure. It would be impossible for me to count the number of times over the years when a representative of Bloomberg has reiterated that they could not adjust their prices. Regardless of the reason for my request: a gap in functionality, a problem…

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When the Going Gets Tough, the Tough Get Creative: Electronic Trading Releases Some Bold New Ideas

Just when we were beginning to think the world of electronic trading and alternative trading was getting a bit stale, some innovative and noteworthy initiatives surfaced on three continents this February. Australia made news with the announcement of a new electronic exchange, Money Market and Debt eXchange (MMDAX). The aim…

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Korea Update: Risks of a Return to The Hermit Kingdom for Derivatives?

This month, we have a special contribution from Chris Price, MD of AsiaEx Consulting. AsiaEx Consulting is a specialist consultancy committed to providing expert, practical and independent advice on the complex and fluid world of market structure in Asia. Chris writes about the proposed regulatory reforms in Korea and the…

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Balmoral Advisory’s Vision for 2012

Balmoral Insight–As the market and regulatory landscape takes shape in 2012, Balmoral Advisory’s monthly newsletter will offer you their informative insights and thoughtful perspectives on the most newsworthy events of the previous month. For January, our top stories are: The Year of The Dragon: China Breathes Fire into their Capital…

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Who Ends Up Paying for Competition? – It is a Vicious Circle

Brokers in Australia got an early Christmas present from the Australian Securities Investment Commission (ASIC) when they received an invoice for a new financial levy that will be introduced in Australia to pay for the costs of moving market supervision from The Australian Stock Exchange to ASIC. The calculation is…

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The Year of the Dragon: China Breathes Fire into their Capital Markets

China burst into the New Year by introducing new reforms that will further liberalize their capital markets. Among the highlights was the introduction of a new initiative, the Centralized Securities Lending Exchange (CSLE) that will facilitate short selling by lending shares to qualified domestic fund managers for a fee. It…

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Facing Forward and Focusing on the Future – Top Ten Newsworthy Market Events of 2011 in Asia

Even though the dramas in Europe took centre stage for much of 2011, Asia was busy working in the wings and preparing to take over the spotlight in 2012. 1. SGX-ASX merger attempt – Bold and Innovative This event takes top spot even though the transaction fell through when the…

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Dollars and Sense: Manage your Expenses and Expectations in Asia

This year we have seen tremendous uncertainty in financial markets across the world. In August, the U.S. nearly defaulted on its enormous debt obligations and had to raise its debt ceiling to keep their books afloat. Now, European markets are going through their own financial crisis as countries such as…

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Alternative Trading Venues in Asia – One Size Does Not Fit All

If you take a step back and evaluate the purpose of an exchange, its primary function is to raise capital and its secondary function is to provide price discovery and liquidity to the market. A country in the early stages of its development life cycle will be more focused on…

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Solid Sales and Marketing Strategy + Army of Advocates = Business Success

Taking an idea and building it into a viable product or business requires a lot of planning, analysis, development and testing to ensure that it both meets the standards and exceeds the expectations of the marketplace and the users of the product However, building a good product or business does…

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On the Outside Looking In – The Value of an Objective Third Party

It is human nature to seek and value opinions. We all do it in many different types of situations – we seek recommendations for restaurants, our next holiday destination, tax and legal advice, the best schools for our children. We do this because we feel a level of uncertainty and…

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A Deal Maker – Why Your Presence is Required in Asia

Prior to my work in product development, I covered the Benelux region as an institutional bond salesperson for TD Securities. In this role, I learned very quickly that there was a certain protocol that needed to be followed to successfully sell into this region. There was an unmistakable standard for…

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The Idea is Only Part of the Journey – The Balmoral Research Approach

I am a big fan to Thomas Alva Edison’s way of thinking.  I used one of his famous quotes on the home page of my website; “Good Fortune is what happens when opportunity meets with planning.”  Another one of his famous quips is “Genius is 1% inspiration and 99% perspiration”….

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Balmoral Advisory – The Vision behind the Venture

Most new products and businesses come from an idea, passion or opportunity. They may also result from dissatisfaction with the status quo or a desire to increase profits, remain competitive and expand market share. There is that eureka moment, “I can do this better”. The success of the Virgin Group…

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