By Chris Lees – Vice President, SunGard’s Global Trading Business
I saw this article in Securities Industry News on the Ten Trading Technology trends for 2010 and while I was interviewed for the article, I would like use this blog post to expand on some of the topics discussed. When thinking about technology trends, most people are trying to predict where the next big investment lies and which technologies will gain the most momentum in the upcoming year. In my opinion, the major theme of 2010 will be capacity.
As high frequency trading continues to expand, there will be an increasing demand for co-location facilities and higher venue capacities, which in turn with push market data rates higher. There will be increasing investment in technologies optimized to increase efficiencies in high volume environments, including Complex Event Processing and high capacity database loads.
In addition to capacity, we will continue to see regulations having an impact on technology. We have seen tons of new and proposed regulations which will have a great impact on the future of technology and how businesses are using trading technologies. The recent SEC rule proposals on short sales, “Flashing”, dark pools and high frequency trading will have a potentially significant impact on both the functional aspects of trading technology and the deployment of that technology. For example, the proposal to ban flash orders may give rise to alternative communication workflows and traffic (possibly immediate or cancel orders), while short changes to short sales and restrictions on “naked” sponsored access will create significant functional and architectural change.
What is the biggest challenge facing technology decision makers? With the potential of significant regulatory change on the horizon (as the SEC acts on the feedback from numerous rule proposals) the challenge will be to balance the need to expand capacity, increase transparency and evolve functionality of existing systems, versus the revolutionary impact of regulatory change.