Expectations Under The Trading Industry’s New Regulatory Regime

The regulation of our financial markets is always a topic of heated debate around presidential elections and inaugurations, especially as political regimes change. And of course, the events in equity markets at the end of January both renewed and catalyzed fervent calls for regulatory reform.

As Democrats leverage control over both the executive and legislative branches to enact their agendas and pursue their campaign promises, generalized expectations are for greater oversight. Republican appointees, traditionally viewed as deregulatory in spirit, are vacating their chairs at the Securities and Exchange Commission, and Commodity Futures Trading Commission to make way for Biden’s picks, promoting an orderly transition of power and allowing Biden’s team to implement their preferred policies. At BornTec, how these issues impact our clients remains top-of-mind. We’ve spent considerable time building flexible solutions and we always keep an eye on the future to seamlessly adapt to new situations.

So, does the trading industry know what it’s getting out of two new leaders at the SEC and CFTC?

The SEC remains the clearer of the two: Gary Gensler, Biden’s choice to run the SEC, is well-known to the trading industry after running Obama’s CFTC from 2009-2014. Notable for his push for more oversight on derivatives trading, as well as the pursuit of the legal case regarding LIBOR manipulation, he can be viewed as embodying a more fervent regulatory spirit. While some uncertainties have arisen after recent controversy that struck equity and options markets, a consensus seems to have formed in prognosticating his time as chair.

The CFTC, an agency focused entirely on the derivatives industry, has a bit more clouded future. Reuters recently reported that Chris Brummer is expected to be nominated to replace Heath Tarbert, Trump’s most recent CFTC chair. But, beyond recent academic work in the crypto space, his presumptive policy targets and ideals are much less defined.

To determine the changes that can be expected in relation to the previous CFTC, we took a look at Tarbert’s term as chair. Possibly against the traditional expectations of a Republican appointee, under Tarbert’s leadership the CFTC dealt out a record number of enforcement actions in 2020. The CFTC website lists 77 documents detailing regulatory actions announced or implemented in 2020 and 35 in 2019; in 2018 and 2017 there were 13 and 10, respectively. Furthermore, Tarbert claimed nearly 90% of the final rules he enacted were bipartisan in nature, and nearly 80% were unanimously voted upon by the agency’s bipartisan group of commissioners.

Although some of these rules resolved issues created by COVID-19, the apparent bipartisan nature of his tenure, and the volume of decisions, imply a not-so-drastic change at the CFTC once a new chair is confirmed. The focus of a potential Brummer chairmanship may shift in a yet-to-be-determined fashion — but in terms of overall enforcement action, the trading industry may not experience the difference in regulatory oversight from the CFTC that the financial industry in general is foreseeing from the SEC.

What are your thoughts and expectations with a new regulatory regime? Leave us a comment on our latest LinkedIn post, and for more information on how you can use BornTec’s data hub functionality to meet new regulatory requirements, reach out to us at sales@borntec.com


Building on Success: Recapping BornTec’s 2020

It’s safe to say that when laying out our roadmap for this past year, no one at BornTec predicted the twists and turns 2020 would provide. And working in the financial markets added an extra layer of uncertainty (and, for lack of a better term, volatility) to the equation.

But we have been fortunate in many regards this year. Top of mind is that our team remains in good health. We are also fortunate for the tremendous strides we’ve made as a software provider. From comprehensive improvements to our flagship product with the launch of CrossCheck 2 to widespread sales growth, it was, in many ways, a banner year for BornTec.

As I look back on the year, I know part of this is attributable to our nature as a business: our team was 40% remote before March of this year. We had already instilled a workplace culture that emphasized flexibility, and we had been leveraging remote working tools such as Zoom since mid-2019. This allowed us to transition to a fully remote work environment with ease, causing minimal disruptions in our ability to service our clients.

Of course, our success is also due in large part to the dedication and resilience of our team. We set lofty engineering and sales goals for ourselves at the end of 2019, and it was an all-hands-on-deck effort to achieve those as the year progressed. Many of us embraced new responsibilities as we lent helping hands across teams. Personally, I wore a new hat as I shifted my focus away from business development and more towards product development and management. But while this was necessary, it had an added benefit — my previous time spent externally evangelizing helped our team to better tailor CrossCheck 2 to what our clients wanted and needed. This was a common thread: collaboration was ubiquitous in and between our teams, which helped improve our processes and therefore our deliverables for our clients.

This internal success was brought to bear as we achieved major sales growth. Traditional sales processes are more challenging to transition into a remote work environment than engineering ones, but our strong new business pipeline gave us time to adapt and build out a remote sales strategy. And it was a complementary effort: CrossCheck 2’s feature and functionality enhancements supercharged our ability to hit our sales targets. In 2020 as a software provider, we saw an 81% growth in CrossCheck clients, and a 65% increase in revenue.

With this exciting pace of growth — CrossCheck 2 saw over 1.5 billion transactions in 2020 — it’s become ever more urgent to stick to our roots and emphasize development operations. Sure, it may not be flashy, but when we optimize and automate our internal processes, we can deliver better results for our clients. As we continue to grow in 2021 and beyond, we are committed to staying ahead of the curve in feature and functionality upgrades while still providing the highest quality customer experience.

For more information on CrossCheck 2, our comprehensive solution for data management, surveillance, risk, compliance, and regulatory reporting, please reach out to us at sales@borntec.com.


In a Data-Driven World, Brokers Need to Unlock the Power of Their Own Data

The proliferation of big data across global business has been well documented and is readily apparent in everyday life. From the smart watch on your wrist to the advertisements on your screens to the elections in which you cast your vote, data is being mined, analyzed, and leveraged to create actionable business insights.

The financial industry as a whole is no laggard in this effort. Fintech startups leveraging the power of data continue to take the industry by storm, and — even after a year of mixed returns for quants — a recent U.S. Securities and Exchange Commission report labeled the use of algorithms in trading as “pervasive.” But the rise of big data, for all its benefits, now means traders — both systematic and discretionary — must contend with an ever-increasing volume of data from discrete and disconnected sources.

Picture a trading desk at a mid-to large-cap bank dealing heavily in energy. Some on the desk may conduct their trades on Fidessa, while others may utilize CQG or another vendor, or an internally developed platform. These platforms all have the capability to display and analyze data, allowing the trader to learn from their previous behavior — but the systems don’t speak to each other. For this team of energy traders, their data is stuck in silos with no way to effectively use it as a group.

This issue of siloed data is compounded by a regulatory environment that requires that trading data speak to each other. Increasingly complex and ever-changing reporting standards (both abroad and domestic) necessitate automated systems that can query and submit historical trading activity at the drop of a hat, and hazy and potentially ambiguous market abuse statutes require the availability and accessibility of trading data for real-time monitoring.

These concerns are what our flagship product, CrossCheck 2, was designed to alleviate. At BornTec we like to say we “break down the silos” in which your data is stuck, but that may be an overwrought metaphor — we aren’t taking a sledgehammer to internal and external business systems, but we are efficiently aggregating the data contained within these systems and normalizing it. In effect, we allow your data sets to talk to each other at scale.

It is this automation — done in a real-time environment — that unlocks the power of the data at every trader’s fingertips. Offices no longer have to worry about where to find trading history when the government comes knocking, nor do they have to worry that they are missing out on insights already on hand. By collecting, collating, and connecting various streams of data, CrossCheck 2 allows traders to do what they do best: look for patterns and leverage them for favorable outcomes.

For more on CrossCheck 2, and how you can do more with your own data, reach out to us at sales@borntec.com