Post-Trade Technology – Reactive or Progressive?
Post-trade technology enables brokers and investors to confirm and report trades, and is essential to the effective operation of these firms. However, the technology at the heart of many of these systems was designed for a simpler trading environment. As the environment has evolved, for example through new regulations and the growth of alternative asset classes, firms have been forced to adapt their systems. This has often involved piecemeal upgrades, building on previous amendments and involving inefficient workarounds.
With both their systems and the trading environment becoming more complex, the potential problems for firms increase. These include the possibility of failed trades, lost business, ineffective risk management and the inability to ensure regulatory and reporting compliance. These are significant risks, which no firm can afford to ignore.
This paper considers how the trading environment has changed and how it continues to evolve, and looks at the characteristics that post-trade systems should have, so they can anticipate developments rather than merely react to them.