Hot Topics at Sifma Ops: T+2, CAT, Blockchain

What a week it's been!

The Securities Industry and Financial Markets Association (Sifma) Ops conference is always a whirlwind of panels, meetings, and introductions that tend to make the entire week gel together into one caffeine/alcohol-fueled experience.

I'm not here to try and get you to pity me for spending a week in Miami Beach, Fla., but as I write this it is absolutely pouring outside, lest you think it's simply sunscreen and margaritas.

I've already written some articles from the conference, and plan to do more, but I figured it would be good to give a general overview of the biggest topics touched on at the event.

This is actually an easy exercise, as these were issues that drew more attention than anything else discussed at the conference. For the time being, I'm just going to share some quick thoughts on them. If you're interested in a deeper dive, keep checking the Sifma Ops tag here, and listen to our Waters Wavelength podcast on Friday, during which I'll discuss Sifma Ops in greater detail. How's that for a plug?

T+2

The shortening of the settlement cycle for US equities from three days to two hasn't gotten too much play with us because it's not a massively complex deal for most firms. Many already have the infrastructure in place, or are well on their way, to meeting the proposed deadline of the third quarter of 2017.

That said, there is still work to be done. Sifma Ops featured two panels dedicated specifically to T+2, and several other speakers touched on it. A lot of the focus was on the specific rules changes and dates not having been released yet.

And while Steve Luparello, director of the US Securities and Exchange Commission's division of trading and markets, joked that crossing out a three and writing in a two isn't the hardest rule change he's had to make in his career, there are still hurdles to overcome. Most experts in attendance seemed confident the move to T+2 would be relatively smooth, but as Graeme McEvoy, global head of ISG product operations at Morgan Stanley pointed out, the proposed deadline is rapidly approaching and those who have not started projects could be in serious trouble.

Consolidated Audit Trail

A lot of the attention the Consolidated Audit Trail (CAT) drew was no doubt due to the SEC publishing the NMS Plan and economic analysis for comment recently. Still, the CAT is a massive project that affects several parts of the industry.

The major takeaway is that after years of delays it seems like the ball has finally begun to roll on building the CAT. Make no mistake; we are still, at the bare minimum, almost a year away from one of the three final bidders being selected as a plan processor. Progress, though, has been made, and the fact the NMS plan has been published for comment means the industry can finally begin to give feedback in a public forum about the CAT.

Judging from the panels I attended, we are still a long way away from the system actually being implemented. There are still plenty of issues that need to be debated. One thing was made very clear by both Maura Miller, director of equities compliance at Credit Suisse Securities, and Dave Emero, vice president of regulatory operations at Goldman Sachs, at a panel: The proposed timeline is far from realistic.

Blockchain

I hope you all understand that writing this segment is practically making me sick. I know a lot of you are sick of hearing about the "potential" or "opportunity" blockchain holds. The fact remains that it is a topic that is continuously brought up at nearly every financial services conference. 

Distributed ledger technology was discussed at almost every session I attended, and if it wasn't organically touched upon by a speaker, an attendee would ask a question about it. Even during the general meetings I had with various folks in the space, the topic of blockchain would come up.

The way I look at blockchain hasn't changed. It is the pool at the party during the summer. Everyone wants to eventually go swimming in it because they know it will be fun and refreshing, but no one wants to be the first one in. So instead of one person cannonballing in, you have everyone linking arms (See: consortiums) and slowly dipping their toe in the water at the exact same time.

I'll have more on Sifma Ops throughout the week, in addition to a great podcast on Friday, but that's it for now.

This week on the Waters Wavelength podcast ─ Episode 15: Consolidated Audit Trail

If you haven't already, subscribe to the podcast on iTunes here. Also, check out our SoundCloud account here.

Food for Thought

• Our features for May have begun to go live. As always, I'm love to do some self-promotion. I profiled Nasdaq CEO Bob Greifeld. He had some interesting takes on blockchain, machine learning and high-frequency trading. He's a fascinating man, and I think, at least I hope, the story's an interesting read. Check it out here.

• The Sell-Side Technology Award write-ups have also gone up. Click here to check them all out.