Mostly… fixed income and cross product eTrading

March 19, 2007

terms of business

Filed under: Nuts and Bolts — holky @ 9:25 pm

Isn’t is astounding that in this digital age that when getting setup with electronic trading services that your application and setup can’t be done entirely electronically as a matter of course?  

Yes dealers need to set out their terms of business and address any risks associated with a transaction being executed electronically, but sending out dealer-specific contracts which require review and signature (especially when the standard terms of business do not require signature – you know who you are!) surely means any customer will need a pretty strong reason to persist in getting e-connected to that dealer. 

Drawing a parallel with the retail ecommerce space, if the great unwashed can buy and sell things without first having to do anything more tedious than click to accept some terms that they didnt actually read, have the dealer lawyers who’ve defined electronic trading terms requiring signature overengineered a solution to address the perceived risks of trading electronically in the capital markets?  

Surely it is easier to verify (even without signature on agreement) a trader at a customer firm is actually a) known at that firm, b) approved by them to trade electronically with you.

If the etrading access being given materially changes the customers risk profile then surely the better route to address this is to ensure adequate trading controls to prevent this additional risk are built within the electronic trading service?   

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2 Comments »

  1. Entirely agree Holky. These banks that don’t seem to have the ability to issue a “fire & forget” T&Cs baffle me!

    They do know who they are & they tend to be based on the continent…..

    In saying this, there still remain a few ECN’s who have an amazingly manual process in not only signing up but onboarding buyside clients. Likewise, this baffles and annoys all involved.

    Comment by waratah — March 20, 2007 @ 8:17 am

  2. Its probably worse than just baffling – Its difficult enough persuading some of the more “traditional” (phew no mention of age) customers to trade electronically anyway, without giving them reasons to put off signing up until “another day”. The ecns with overcomplex procedures are killing their own chances of becoming part of these guys trading workflows.

    Comment by holky — March 22, 2007 @ 7:23 pm


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