Midnight in the Rue Jules Verne

Martin Wheatley's rambling, if interesting speech the other day provided much food for thought. The UK Financial Conduct Authority (FCA) chief executive was speaking at a PR-organized conference in London last week, delivering a keynote that veered ─ wildly at times ─ between retail concerns and high technology issues in wholesale capital markets. High-frequency trading (HFT) was covered alongside mobile payments, cybersecurity with technology incubators in Level 39 and Silicon Roundabout, that cringe-inducing British answer to the Bay Area's tech wellspring.
Indeed, the golden points here were actually in the first half and summary. Wheatley highlighted the difficult role of the regulator when it comes to technology ─ that is, enabling innovation and not standing in the path of advancement, while also trying to resist what he referred to as a "dystopian" future where the growth of tech created a Wild West in which algorithms, AIs and Hugo Weaving run amok. The FCA has come down with a strong case of the Chiba City Blues, apparently.
The second key part of Wheatley's speech, and perhaps a critical way of seeing inside the regulator's grapefruit, is the way in which he framed the future of financial services. It would, he said, be shaped in the future by the engineers and comp-sci students of today, those who have their elbows in the guts of the machinery, and not necessarily the ones who are knee-deep in M&A books at three in the morning on a Saturday. The comments about HFT are relatively throwaway (tighter spreads!), as are those on cyber security, short of saying that everyone should be doing it, and that the FCA has a pretty decent tech base for monitoring markets now.
Regulatory Clouds
Continuing this dystopian theme, the sky above Mansion House was appropriately the color of television, tuned to a dead channel, as George Osborne MP, the UK chancellor, arrived for his annual speech to the City. As expected, he announced a foreign-exchange (FX) market review, although this would be supported by a panel of experts from industry, along with an expansion of criminal penalties for rate fixing. I'm not a lawyer, so I can't say why this wasn't already covered under fraud, but that's just me.
To be honest, while some can argue that mechanisms and processes are favorable to regulation, the fact that the FX market has been largely unregulated is anomalous in the modern landscape, particularly given its size and importance. With the move to electronic trading comes a technology-based way to effect oversight, and even if it weren't for the various scandals that have plagued it over the past few years, this was likely coming anyway.
As a final note, I'll be in Singapore next week for our Asia-Pacific Trading Architecture Summit, and the Buy-Side Technology Asian Summit, where I'll be moderating various panels and chairing both events. If you'll be at the events, see you there, or if you'd like to meet up and discuss issues facing financial firms in the region, send me an e-mail at james.rundle@incisivemedia.com.
Only users who have a paid subscription or are part of a corporate subscription are able to print or copy content.
To access these options, along with all other subscription benefits, please contact info@waterstechnology.com or view our subscription options here: https://subscriptions.waterstechnology.com/subscribe
You are currently unable to print this content. Please contact info@waterstechnology.com to find out more.
You are currently unable to copy this content. Please contact info@waterstechnology.com to find out more.
Copyright Infopro Digital Limited. All rights reserved.
As outlined in our terms and conditions, https://www.infopro-digital.com/terms-and-conditions/subscriptions/ (point 2.4), printing is limited to a single copy.
If you would like to purchase additional rights please email info@waterstechnology.com
Copyright Infopro Digital Limited. All rights reserved.
You may share this content using our article tools. As outlined in our terms and conditions, https://www.infopro-digital.com/terms-and-conditions/subscriptions/ (clause 2.4), an Authorised User may only make one copy of the materials for their own personal use. You must also comply with the restrictions in clause 2.5.
If you would like to purchase additional rights please email info@waterstechnology.com
More on Regulation
Waters Wavelength Ep. 332: DTCC’s Val Wotton
This week, Val Wotton joins the podcast to discuss the necessary steps leading up to the T+1 transitions in the UK and EU.
DORA delay leaves EU banks fighting for their audit rights
The regulation requires firms to expand scrutiny of critical vendors that haven’t yet been identified.
Citi gears up for EU T+1 climb
The bank has a dedicated team examining what it needs to do to ensure a successful transition to T+1 in Europe.
The great disappearing internet—and what it could mean for your LLM
AI-generated content, bots, disinfo, ads, and censorship are killing the internet. As more of life continues to happen online, we might consider whether we’re building castles atop a rotting foundation.
AI’s next gig: The rising cost of off-channel communications compliance
As the cost of analyzing communications increases, what tools can firms deploy to save time and money while avoiding penalties?
CAT on life support after appeals court ruling
Ahead of a comprehensive review promised by the SEC, lawyers believe that the recent overturn of the Consolidated Audit Trail’s funding order could herald its demise.
Euroclear readies upgrade to settlement efficiency platform
Euroclear, Taskize, and Meritsoft are working together to deliver real-time insights and resolution capabilities to users settling with any of Euroclear’s CSDs.
Messaging’s chameleon: The changing faces and use cases of ISO 20022
The standard is being enhanced beyond its core payments messaging function to be adopted for new business needs.