Thoughts to Finish the Year

Wrapping up and sounding off.

As we head into the Christmas and New Year period, it's become time for us to begin our round-up stories. As a result, it's struck me how much has happened this year, even if it's just under the surface.

Obviously, the regulatory wagon rolls on. In the US, at least, there's been some definitive progress towards restructuring, as over-the-counter derivatives rules are cemented and swap execution facility (SEF) go-live approaches. In Europe, lawmakers and policy chiefs are still dragging their feet of course, causing no end of consternation on the participant side, as my colleagues on Risk and FX Week report. The extraterritorial implications of the Dodd-Frank Act continue to be argued about, with foreign regulators joining in, although the re-election of Barack Obama as US president firms up that this will be happening, despite hot air from challenger Mitt Romney.

Otherwise, there have been the usual flash-in-the-pan tech moves. Trading through sentiment analysis, for instance, enjoyed a brief focus of attention before subsuming into the role of being a trading supporter rather than engine. Cloud and Big Data, while still challenges, are becoming settled. Analytics are an area for study next year, as well as the continuing focus of data management, particularly with the Securities and Exchange Commission (SEC) becoming more tech-focused, despite a swathe of departures recently. In the UK, the FSA has said that it's not going to be demanding real-time reporting next year, but it's clear that the mechanical pedigree of the overseers is becoming more in line.

Transaction cost analysis, settlement time horizons, risk management technologies and compliance function tools have all been hot button topics, along with the growing use of field-programmable gate arrays and the ever-present use of outsourcing. Meanwhile, at the institutions themselves, numerous scandals and increasing pressures on both budgets and constraints imposed by measures such as capital adequacy requirements have shrunk headcounts and the amount of cash available for new spend.

Perhaps it's worth thinking about everything that's happened this year, and how it'll be approached in 2013. Acceptance of the status quo seems to be common─people accept that regulation will happen, that budgets will shrink, and that a return to pre-crisis wealth ubiquity may not happen for a long time. Five years on from when the crisis really kicked in, though, perhaps it is time to accept what's happened and begin to move on, uncertain though the future may be.

This will be the final editor's letter for Sell-Side Technology of 2012, as our London office is closed from December 20 through to January 2. Thanks for your support of this magazine during 2012, and we look forward to speaking with you next year. Have a very merry Christmas and a happy New Year, from all of us at SST and Waters.