INTERVIEW | From the viewpoint of financial market participants, a deepening connection between the back and front offices have been at the heart of change in the running of securities operations, through these last five years, thinks AFME post-trade head Peter Tomlinson.
“Scratch below the surface on ‘hot topics’ such as CSDR settlement discipline or the (potential) move to T+1 settlement, and it becomes clear that there is a much broader impact than just post trade. From a personal perspective, it has been pleasing
My 5-year observations
Peter Tomlinson, director of post-trade and prime services, the Association for Financial Markets in Europe (AFME)
• Regulation, regulation, regulation
• Increased alignment between front office and back office
• Rationalisation of DLT use cases
to see increased focus and collaboration from trading desks and heads of business, who want to better understand the impacts of these issues on their bottom line,” says Peter Tomlinson.
A users’ voice
Essentially representing the sell side in the European securities market – “the banks” – AFME finds itself largely on the side of buyers when one zooms in instead on the market for post-trade services (although the Post Trade division hosts custodian banks, too, with aspects of being both users and providers). This makes the organization one of few strong-voiced representatives of coordinated users in the space. With a view to supporting its industry’s operational insight, AFME will be staging its second yearly edition of its “Optic” event (Operations, Post-trade Technology and Innovation Conference) in Brussels in October, after the launch in London last year.
Peter Tomlinson also sees efforts around regulation having continued at high intensity.
“AFME’s role as a trade association typically involves a mix of reviewing and reacting to regulatory and policy proposals by public authorities, and being proactive in promoting new ideas and initiatives to develop Europe’s capital markets or create efficiencies. It is fair to say that the past five – or even ten – years have been characterised by a high degree of regulation in European securities markets, most notably CSDR and SRD II. These regulatory changes have hopefully brought about a stable and secure basis from which to focus in the years to come on growing our markets and being innovative,” he says.
In DLT, early payoffs finally show
Like several of our other 5-year lookback interviewees, Peter Tomlinson describes a more nuanced and discussion about DLT-driven industry improvements, compared with five years ago – where results can now be observed.
“Although the industry has been exploring DLT usage for several years, we are now starting to see early real-world benefits, across a variety of use cases. The most notable successes have been in projects with the clear drivers for adoption – that is, those focused on addressing specific inefficiencies in existing processes. These range from improving collateral mobility, to enabling more efficient intra-day repo transactions to reducing the length and complexity of issuance processes.”