E-Trading Expected to Increase Trading Volumes in Swaps Market
With the anticipated advent of electronic trading in the swaps market, swaps will be traded in an increasingly more efficient, dealer to customer market environment. At The Bond Market Association's Annual Technology Conference on December 8, 2004, Michael Spencer, Group Chief Executive Officer of ICAP (pictured left), explained that the volume in the cash markets increased as a direct result of the implementation of electronic trading. Likewise, it is expected that e-trading will increase the efficiency in the derivatives market, thereby making it more cost-effective to execute smaller swap transactions. At the Association's Technology Conference, it was also pointed out that by increasing the cost effectiveness of trading swaps, a sharp increase in trading volume and greater liquidity would most likely follow.
While the front office of many trading floors may be ready to electronically trade swaps, there may still be a need for adjustments in the operations departments, but these adjustments are in the process of being made by virtue of the AMF Best Practices Initiative that is currently underway.
The Asset Managers Forum, the leaders of the AMF Senior Executives Group and the leaders The Bond Market Association's Technology Committee will take the lead on educating buyside and sellside securities firms on technology developments that will affect the businesses of asset management firms and broker/dealer firms alike.
Click here to read Michael Spencer's Keynote Address
SEG Meeting and TBMA Annual Business Meeting
Yesterday, the AMF Senior Executives Group ("SEG") met at the offices of The Bond Market Association to discuss relevant business items going into 2005. Thomas Hirschfeld, COO at J. & W. Seligman and SEG Chairman, lead the meeting and spoke on three new positions within the SEG, namely, the D.C Meeting Coordinator, the formation of a tri-party Membership Committee and the creation of the Dealers Advisory Group. John Gidman EVP at Loomis Sayles spoke on the progress that has been made by the SEG Boston Meetings that he, Tom Sorbo COO at Standish Mellon and Joseph Sack, SEG Executive Director have conducted. Mr. Sack also reviewed the preliminary SEG Calendar through June 2005. Stephen Francis of Fischer Francis Trees & Watts spoke on the Group's work with mutual fund reforms and the meetings with the SEC.
The SEG agreed to continue to develop its advocacy initiatives which include developing SAS 70 Best Practices by forming a committee, continuing to monitor both regulatory and legislative reforms and developing an "Advocacy Survey" among other projects. The SEG members and staff will continue to work through December in preparing for the SEG Washington D.C. meeting in January and West Coast meeting in February.
After the SEG Meeting, Group members attended The Bond Market Association's Annual Business Meeting. At the meeting, Edward C. Forst of The Goldman Sachs Group, Inc., was elected as Chair. Blythe Masters of J.P. Morgan Chase & Co. was elected Vice Chair and Michele Faissola, of Deutsche Bank, London, was chosen to be the Association's Treasurer. All three will serve eighteen month terms beginning July 1, 2005. The current Chair, Bart McDade, managing director and global head of the fixed income division at Lehman Brothers, will remain chair through June 30, and Mr. Forst and Ms. Masters will complete their current terms as Vice Chair and Treasurer, respectively.