FIX Nordic Trading Briefing 2018: Evaluating Change and Finding Opportunities
By Peter Fredriksson – Chairman and Co-Founder of Baymarkets
The past twelve months have witnessed some of the most significant changes ever to take place within the Nordic financial markets, with many key market dynamics having altered in the process. As such, the return of the FIX Trading Community Nordic Trading Briefing, now in its 9th year, was a highly-anticipated event on the calendar for many in the industry, myself included.
This year’s excellent opening address was delivered by Kerstin Hermansson, managing director of the Swedish Securities Dealers’ Association (SSDA). Kerstin has led the association since 2006 and in that time has overseen the important work of the association to the benefit of its members, including becoming increasingly active in following the EU regulatory agenda ahead of key developments, such as MiFID II.
I was also delighted to be chairing the day’s events once again alongside my co-chair on the Fix Trading Community Nordic sub-committee, Morten Lindeman, CIO of Infront. Following on from Kerstin’s address, we presented a joint overview of what has happened in the region over the previous year, how the market is currently fairing and discussed what changes we are likely to see in the future. We predicted this will likely include the Nordic markets working to fix what MiFID II broke and continuing to evaluate the benefits of new clearing regimes.
Moving on from MiFID II
These themes were explored in greater depth in the first of the day’s panel discussions, which focused on what we’ve learnt from the first nine months of MiFID II. Moderated by Rebecca Healey, Head of EMEA Market Structure and Strategy at Liquidnet, the panel believed that although the legislation’s initial implementation has been satisfactory, there remains plenty of room for improvement.
I also agree with the panel’s view that although the start of the new rules did not create the expected ‘big bang’ effect, the industry could still be hit hard by the later effects of ongoing rule changes and amendments. It's now clear that given the fluidity of the political situation in Europe, the industry needs to look to itself to establish best practices rather than rely on regulators. We should also explore how FIX can make a difference.
Spotlight on commodities
The day also notably featured a panel dedicated to the commodities market, which was a first for a FIX event and is still rarely seen on the agenda of most financial conferences. I thoroughly enjoyed chairing this panel, which argued that MiFID II has not significantly impacted this sector to date. Instead, the hot topic was of course the €114 million loss at Nasdaq Commodities last month incurred by a Norwegian energy derivatives trader. A blog I had written prior to this on clearing without a guarantee fund turned out to be very timely - you can read it in full here. Overall, all in attendance agreed that commodities should become a regular fixture in more FIX conferences from now on.
In the afternoon sessions, the panel on FinTechs and emerging technologies highlighted a number of important issues. One of these is the increasing use of blockchain, particularly in the post-trade space, and why this requires a greater use of industry standards, such as FIX. Cloud-based platforms were also said to be becoming much more widely adopted by banks and other financial institutions, while venture capital firms are now apparently more likely to invest in FinTechs which are replacing banks, rather than those which were selling to banks.
As expected, the day’s line-up was relevant, varied and thought provoking. I was surprised to hear little mention of Danske bank’s recent money laundering scandal, but with the Danish regulator having recently reopened its investigation, the true fallout may be yet to come. All in all, this was yet another hugely successful event, and I’m very much looking forward to its return next year.