Despite being a growing reservoir of funds under management, this critically important pool of capital is confronting mounting problems collating and disseminating key data in a timely manner.
The ratings house is pinning its growth strategy on a revamped methodology that increases the emphasis on governance to 25 per cent – a timely move considering APRA’s proposed reforms.
Blockchain ‘not over-hyped’ – Greenwich Associates
It seemed to wane last year, at least in the media, but according to US research house Greenwich Associates blockchain technology is moving from ‘proof of concept’ to ‘production’.
Kevin McPartland, the head of research for market structure and technology at Greenwich Associates, says in a paper published last week that “smart contracts” look to be a key tenet in the capital markets distributed ledger technology (commonly referred to as ‘blockchain’) discussion. He says this will be an area which will grow quickly in 2017.
Of all its published research in 2016 across equity, fixed income and FX markets, its blockchain research was the topic most read by Greenwich Associates’ capital markets clients, McPartland says.
He also advises that the industry should not discount the value of virtual currency, such as Bitcoin. The ability to transfer value around the world with no middleman continues to have the biggest appeal, he says.
The paper, ‘Top Market Structure Trends to Watch in 2017’, Â suggests that market activity will be reinvigorated by the Republican-led US Government, which will be less prescriptive and have a “lighter hand’ than its Democrat-led predecessor.
Greenwich Associates, which tends to concentrate its research in the alternatives space, particularly for hedge funds, predicts that proprietary traders will move beyond their traditional remit and act as outsourced trading desks for big investors.
The firm’s top 10 predictions are:
- Capital markets regulations are “right-sized”
- The “Trump bum” will continue to help markets
- RTFs will keep growing despite eventual limits
- Proprietary trading will move beyond trading
- Fixed-income e-trading will “grow up”
- Futures will get more popular
- The buy-side of investments will go further along the best-of-breed path
- The “Tick Size Pilot” program will turn out to be a zero-sum game
- Cloud computing will become known simply as ‘computing’, and
- Blockchain will move from proof of concept to production.
