Enhanced operational models help broker-dealers navigate and manage fixed income market risks.
LAKE SUCCESS, N.Y., June 27, 2012 – Financial market volatility has sent investors scurrying for protection, liquidity and more stable returns similar to those found in the fixed income markets. This demand, facilitated by electronic trading platforms, has increased risks for brokerage firms, notes a new report from Broadridge Financial Solutions, Inc. (NYSE:BR) entitled, “Market Volatility & Trade Fails Drive A New Fixed Income Standard.”
Over the last ten years the amount of global debt outstanding has more than tripled, reaching an all-time high of $100 trillion USD. The combination of demand and expanded offerings by brokerage firms has led to a substantial increase in average daily trading volume.
But increasing volumes has also led to a rise in settlement failures and costs associated with the fixed income trading systems. In response, some broker-dealers are beginning to design data management strategies to not only reduce the cost of data but, more importantly, to support a high level of straight-through-processing across the trade lifecycle in order to mitigate risk, reduce settlement failures and provide a seamless client experience.
Others are beginning to look toward a new fixed income operating model.
“The continued demand for fixed income products and the volatility of the markets is forcing broker-dealers to find innovative ways to structure their operations to keep up with the growing investor appetite while also mitigating operational risk,” said J. Michael Hopkins, President, Securities Processing Solutions Fixed Income, Broadridge. “By looking at a new operating model, broker-dealers can more efficiently grow and manage risks while driving costs out of their operations.”
The new fixed income standard can be achieved in the steps outlined below:
Core technology and operations must be able to support the specific requirements of processing a range of fixed income instruments and financing transactions across the globe while handling volume spikes;
To obtain a copy of the white paper, “Market Volatility & Trade Fails Drive A New Fixed Income Standard”, please visit: www.broadridge.com.
Broadridge Financial Solutions, Inc. (NYSE:BR) is the leading provider of investor communications and technology-driven solutions for broker-dealers, banks, mutual funds and other corporations. Broadridge’s investor and customer communications, securities processing and managed services solutions help clients reduce their capital investments in operations infrastructure, allowing them to increase their focus on core business activities. With over 50 years of experience, Broadridge's infrastructure underpins proxy voting services for over 90% of public companies and mutual funds in North America and processes on average $5 trillion in equity and fixed income trades per day. Broadridge employs approximately 10,000 associates in 14 countries.
For more information about Broadridge, please visit www.broadridge.com.