Robo-Advisors on the Rise in Asia trading technologies for fi nancial-market professionals PUBLIC CLOUD WARS Shining a Light on Shadow IT EMBRACING CHANGE Ian Thompson marries technology and operations at Fidelity International waterstechnology.com April 2017 Lightning Fast 2U 48 NVMe Simply Double 1U 10 NVMe Ultra SSG-2028R-NR48N SYS-1028U-TN10RT+ BigTwin™ 2U/4 DP Nodes, 6 NVMe/SAS3/SATA3 per Node 2U 24 NVMe Ultra 7U 42 NVMe SYS-2028U-TN24R4T+ 2U 40/20 Dual Port NVMe Datacenter Blade® SSG-2028R-DN2R40L SSG-2028R-DNR20L Supports Intel® Xeon® processor E5-2600 v4/v3 product families Over 60 SKUs Enabled Optimized Hot-Swap NVMe Designs Highest Quality The Leader in NVMe Server Development 03_Q3_SM_USP_121416_MasterFile_AllFlashNVMe_Pg2 Learn More at www.supermicro.com Intel Inside®. Powerful Productivity Outside. ©Super Micro Computer, Inc. Specifications subject to change without notice. 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Editor-in-Chief Victor Anderson [email protected] tel: +44 (0) 20 7316 9090 US Editor Anthony Malakian [email protected] Deputy Editor, Sell Side Dan DeFrancesco [email protected] Deputy Editor, Buy Side John Brazier [email protected] European Staff Writer Aggelos Andreou [email protected] US Staff Writer Emilia David [email protected] Asia Staff Reporter Wei-Shen Wong [email protected] Head of Editorial Operations Elina Patler [email protected] Contributor Max Bowie, Editor, Inside Market Data Commercial Director Colin Minnihan tel: +1 646 755 7253 [email protected] Commercial Manager Phil Ansley tel: +44 (0)20 7316 9643 [email protected] Headlines and Deadlines Business Development Manager Tom Riley tel: +44 (0)20 7316 9780 [email protected] Business Development Manager Michael Balzano tel: +1 646 755 7255 [email protected] Deadlines are strange things and people, it seems, are simi- Marketing Manager Louise Sheppey tel: +44 (0)20 7316 9476 [email protected] larly strange when relating to them. British poet and essayist Samuel Johnson once Design Lisa Ling famously commented that, “When a man knows he is to be hanged ... it concentrates Corporate and Single Subscriptions his mind wonderfully.” Johnson, fortuitously, wasn’t referring to himself, but rather to UK: Claudio De Oliveira tel +44 (0) 207 316 9271 US: Barbara Faiman tel +1 646 736 1852 the Anglican clergyman, William Dodd, who was hanged on June 27, 1777, for forgery. [email protected] An execution is certainly a deadline that cannot be ignored—it is, after all, literally Publisher Katie Palisoul a matter of life and death—hence its ability to concentrate the mind. But what about [email protected] Group Publishing Director Lee Hartt the January 3, 2018, Mifi d II deadline? To what extent are capital markets fi rms’ minds [email protected] concentrated on that deadline? That’s a diffi cult question to fathom, although if attendees Managing Director Celine Infeld [email protected] at Waters’ recent Mifi d II event in London can be used as a proxy for the industry, the Chief Executive Tim Weller answer is not very much at all. In fact, not a single fi rm present at the half-day event Incisive Media Head Offi ce confi rmed that they would be in a position to comply with all the Directive’s tenets come Haymarket House 28–29 Haymarket January 3. But, if capital markets fi rms are searching for mitigating circumstances and a London SW1Y 4RX tel: +44 (0)20 7316 9000 modicum of solace for their apparently underwhelming preparedness, they need look no fax: +44 (0)20 7930 2238 further than the UK’s Financial Conduct Authority (FCA) and the European Securities and Incisive Media US Markets Authority (Esma), both of which are unlikely to be in any better position. 55 Broad Street, 22nd Floor New York, NY 10004 Still, not drawing a line in the sand or continually postponing deadlines is a slippery tel: +1 646 736 1888 slope, especially when regulations are concerned. I would argue that if you’re going to Incisive Media Asia let deadlines slip, you might be better served not making deadlines at all. Remember 14th Floor (Unit 1401-3) Devon House, Taikoo Place Aesop’s fable about the boy who cried wolf? 979 King’s Road Quarry Bay Hong Kong Esma extended its Mifi d II implementation deadline by 12 months after the commuta- tel: +852 3411 4888 tion was initially proposed by the European Commission in February 2016 and confi rmed Incisive Media Customer Services some three months later. The industry breathed a collective sigh of relief and did … tel: +44(0) 1858 438 800 nothing (anecdotally speaking, of course). But there will be no further extensions, and quite rightly so. What is clear is that for the fi rst few months of 2018, the EC, Esma and the FCA will have their kid gloves fi rmly donned when dealing with their various constituents. European regulators have a long history of consultative oversight as opposed to the more uncompromising approach of the Securities and Exchange Commission and the Commodity Futures Trading Commission in the US. Both strategies have their relative To receive Waters magazine every merits, but come January 3 next year, I doubt whether any European market participants month you must subscribe to a will bemoan their overseer. That softly-softly approach will of course harden during the WatersTechnology Subscription or a Waters Premium Subscription. For more course of next year, but in the Directive’s immediate wake, fi rms will be cut a bit of slack information and subscription details, on the proviso that they have taken reasonable steps to comply. W visit waterstechnology.com/subscribe Victor Anderson Waters (ISSN 1068-5863) is published monthly (12 times a year) Editor-in-Chief by Incisive Media. Printed in the UK by Stephens & George Print Group, Dowlais, Merthyr Tydfi l, Wales. Published by Incisive Risk Information Ltd and Incisive RWG Sell Side Inc. Copyright Incisive Risk Information (IP) Ltd & Incisive RWG Inc. All rights reserved. No part of this publication may be reproduced, stored in or introduced into any retrieval system, or transmitted, in any form or by any means, electronic, mechanical, photocopying, recording or otherwise, without the prior written permission of the copyright owners. waterstechnology.com April 2017 1 1 Editor’s Letter 4 New Perspectives 12 War of the Clouds The next great battle in the fi nancial services space is likely to be the public cloud sector. Anthony Malakian looks at how competitors are looking to chip away at Amazon’s lead. One thing to keep in mind: There can be multiple winners. 16 Breaking the Code When ripping and replacing legacy platforms is not an option, the answer for some is code modernization. Others say code modernatization is a buzzword, but the key area is tapping into parallelization techniques. By Emilia David 25 Robo-Advisors Permeate Asian 16 Markets Breaking the Code Bjarne Stroustrup Robo-advisors are becoming more By Emilia David Morgan Stanley popular in Asia, especially among retail investors. While it will take some time, these advancements are likely to seep into the institutional space in years to 12 come. By Wei-Shen Wong War of the Clouds By Anthony Malakian 20 The Waters Profi le: Ian Thompson, Fidelity International By John Brazier 2 April 2017 waterstechnology.com April 2017 30 Out of the Shadows GET MORE ONLINE The concept of shadow IT seems simple: News. Webcasts. Video. A project is started without proper authorization because those involved want Audio. Special Reports. Get it to avoid having to jump through the various all at waterstechnology.com hoops required to give it the green light. In actuality, shadow IT is much more nuanced. By Dan DeFrancesco 25 34 CRM Practices Under Scrutiny Robo-Advisors The new General Data Protection Permeate Asian Regulation is an upcoming European Markets By Wei-Shen Wong mandate for the protection of personal data. However, the fi nancial services world has not yet realized the extent to which it will affect it. Most notably in the fi eld of customer relationship management systems, the GDPR will defi ne new ways on how fi rms should process their clients’ data. By Aggelos Andreou 38 John Brazier: Will Fractured Europe Be Left Behind in Post-Brexit Order? 40 Emilia David: Legacies Updated 41 Aggelos Andreou: If It’s Europe, It’s Mifi d II 30 Out of the Shadows 42 Human Capital By Dan DeFrancesco 39 Dan DeFrancesco: Learn to Live in the Shadow: Accepting the Existence of Shadow IT waterstechnology.com April 2017 3 New Perspective Thomson Reuters Enhances Velocity Analytics Platform with Mifid II Functionality Thomson Reuters will offer best execution and systematic internalizer determination services from January 3, 2018. By Aggelos Andreou fter a year of modernizing its market data,” says Carley. “We did tion in corporate bonds because the Velocity Analytics platform, that because clients wanted to use underlying data is not available and it AThomson Reuters is preparing their existing assets.” is diffi cult for the analytics to be able for the new European regulatory land- He says this integration makes to demonstrate quality execution,” scape by introducing two major services it possible for users to leverage their says Carley. “We are working with all for best execution and systematic inter- investments and apply analytics. “By those venues to onboard that content nalizer determination. Adopting the off ering this technology as part of our onto our platform and then integrate technology of Kx Systems, Thomson Elektron managed services platform, that with the Velocity Analytics tech- Reuters is gearing up for Mifi d II, clients can take it as a service and access nology, off ering a multi-asset class best adding two new functionalities that aim it immediately,” Carley says.