Cost cutting in post-trade compliance

Author: | Published: 9 Oct 2014

The case for reviewing costs embedded in operations has never been that compelling, particularly in post-trade.

Systems, flows and products complexity have crept up; regulatory compliance is weighing down balance sheets; commissions unbundling will add to the costs of running funds; margins are shrinking due to asset allocations to more passive products; and core operational processing are increasingly becoming features in due diligence before investors part with their money – particularly in hedge funds.

At the market level, the inefficiencies and complexities of multiple institutions will have an impact on the overall risk while adding barriers to entry. Technology and standardisation may help lower those barriers.

The regulatory focus, aimed at making market participants more transparent, safer and more efficient during the financial crisis, also comes at a cost. It...