‘Technological solutions for trading by financial instruments and for the risks control’ conference was held in Moscow with ARQA Technologies support

26 october 2011

The professional conference ‘Technological solutions for trading by financial instruments and for the risks control’ devoted to the technologies for asset management companies and institutional investors with participating representatives of brokerage and asset management companies, non-state pension funds, exchanges and special depositaries was held in Moscow on the 19th of October. The forum was organized by RCB Media Group and with ARQA Technologies support.

The event was conducted in the form of several debating sessions devoted to actual issues on managing assets and the collective investment. The difference from other similar events consisted in the fact that the state-of-practice technological solutions were the central emphasis of all discussions.

Within the bounds of the first session the issues of receiving and using the information needed for making investment decisions were being discussed. Roman Piontik, TKB BNP Paribas representative, made the fundamental presentation for this part of the discussion. He noticed that the most part of the information for making decisions is received by asset management companies from the brokers and news agencies which serve them. Moreover, the information is received from different sources in disparate formats and often with errors, that is why significant efforts required for checking and unification of the received information. In Roman’s opinion, this activity is to be carried out by special organizations and it would be, in fact, on the outsourcing basis.

During the discussion the opinions of the participants concerning the organizations which could carry out collection, checking and unification the information needed for making investment decisions, were divided. Principal suggestions were reduced to the next - this activity is to be carried out by the joint exchange (but in this case it is not still clear where the information about operations at some segments of OTC and foreign markets can be received from), or large news agencies – informational financial supermarkets (for instance, Bloomberg, Interfax, Finmarket).

At the second session the up-to-date trading infrastructure of asset management companies was being discussed. Vladimir Kurlyandchik, Director of Business Development in ARQA Technologies, made the presentation on this topic. He told about the solutions which allow providing a possibility of online trading via several brokers as well as getting services needed for asset managers. These services are intended for providing monitoring of the integrated position on operations of an asset management company and its clients, providing pre- and post-trade risk management, organizing the electronic document circulation between an asset management company and its clients, on the one hand, and an asset management company and brokers who serve it, on the other hand.

The argle-bargle about whether the market data, including the information about clients’ orders and trades in online mode, is required or not for asset management company’s clients, took place within the discussion of that session. Opinions were divided on right opposites – participants tried to weigh all pros and cons. One group of the participants claimed that the absent of such an informational service for clients is blocking up the development of the collective investments sector, while the other group argued that such a service is mephitic whereas the decisions of asset managers can be unclear for their clients at a certain moment and can cause the flood of requests and explanations. At the same time action of an asset manager, in the medium term, can be affectively directed to achieve the aims of investment declaration. Besides, achieving high-quality in servicing clients of asset management companies in online mode requires significant expenses from the asset management company’s side, for technical equipment and IT staff.

The presentation of Mechislav Sheshelovsky devoted to the plans of organizing the open-end funds’ stakes market in MICEX-RTS group, was made within the bounds of that session and aroused the great interest among the participants.

The third session was dedicated to valuation and managing risks. The main presentation was made by Yuriy Nogin and Dmitriy Veretencev, the representatives of ‘Welfare’ NPF. They shared with the forum’s participants their expertise in automating the activity on managing risks with the usage of SAP system.

The interesting aspect of the further discussion laid in the eventual finding that online pre-trade control for NPF operations via asset management companies is not actual at the present moment, and carrying the operations in online T+0 mode is simply impossible. This is due to the fact that the rules for risk control for the upcoming trading session are being established before the start of trading on the basis of values of the previous trading session and other yesterday’s indicators. At the same time, in the process of calculating the risks parameters for the current trading session, the large volume of information which can not be accounted in online mode is being processed.

Finally, the fourth session was devoted to the issues of different reporting – from brokers to asset management companies, from asset management companies to special depositaries, to the regulator, to clients. The participants of this discussion turned their mind on applying different formats for providing information between the market institutions listed above, and emphasized the importance of standardization. The great expertise and significant achievements accumulated by PARTAD company in providing standardization approach (which are presented in the document ‘Formats of PARTAD electronic interaction’) can be widely applied by other companies. This expertise should be brought to the interested participants of financial markets.

Generally, the conference showed that the discussed issues are urgent for the market participants and conducting such forums on the annual basis is a must.

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