The Global Exchange Landscape: Opportunities Amidst Challenges

by Arin Ray, November 30, 2016
Industry Trends
Global

Abstract

Celent has released a new report titled The Global Exchange Landscape: Opportunities Amidst Challenges written by Arin Ray, an Analyst with Celent’s Securities & Investments practice. 

Key Research Questions

1

What are the key drivers of change impacting exchanges?

2

How are exchange participants impacted by market changes?

3

How can exchanges respond to market changes and challenges?

Regulatory and market structure changes are shaking up traditional arrangements in capital markets resulting in realignments of roles and importance of key participants. To remain competitive in the dynamic environment, exchanges need to stay on top of market evolution and adapt their offerings and value proposition in accordance with the changing situation.

Uncertain economic conditions are suppressing listing and trading activities at exchanges. Growth in multiasset and passive investment preferences is creating demand for new product and asset classes. The sell side’s role is shrinking in market-making, forcing them to focus on execution business. The buy side is rising to fill the void by becoming liquidity providers, and their investment strategies and connectivity needs are growing.

Corporates are looking for alternative fund-raising avenues. Increasing penetration and sophistication of local markets, expansion in product and market coverage, improving data offerings beyond raw pricing information, developing advanced technology solutions beyond traditional connectivity tools, and expanding beyond national boundaries present opportunities for revenue growth.

“Derivative reforms are changing the capital calculus favoring centrally cleared and exchange traded instruments,” commented Ray.

“Most exchange groups are actively working to capitalize on this opportunity by developing new trading, clearing and collateral management solutions,” he added.

 

Celent is a research and advisory firm dedicated to helping financial institutions formulate comprehensive business and technology strategies. Celent publishes reports identifying trends and best practices in financial services technology and conducts consulting engagements for financial institutions looking to use technology to enhance existing business processes or launch new business strategies. With a team of internationally based analysts, Celent is uniquely positioned to offer strategic advice and market insights on a global basis. Celent is a member of the Oliver Wyman Group, which is a wholly-owned subsidiary of Marsh & McLennan Companies [NYSE: MMC].

Media Contacts

North America
Michele Pace
mpace@celent.com
Tel: +1 212 345 1366

Europe (London)
Chris Williams
cwilliams@celent.com
Tel: +44 (0)782 448 3336

Asia (Tokyo)
Yumi Nagaoka
ynagaoka@celent.com
Tel.: +81 3 3500 3023

Table of Contents

Executive Summary

1

     Key Research Questions

1

Introduction

3

Evolution of the Exchange Landscape

5

Drivers of Change in the Exchange Business

7

Evolution of Exchange Participants

11

Broker-Dealers

11

Investors

12

Corporates

13

Navigating the Challenges for Growth

14

     Expanding Product Coverage

15

     Growing Trading and Clearing

16

     Integrating Post-Trade

16

     Improving Market Data Offering

16

     Developing Technology Solutions

17

     Client Segment Specific Offerings

18

     Interconnectivity, Partnerships, Consolidation

18

     Improving Operational Efficiency

19

Conclusion

20

Leveraging Celent’s Expertise

21

     Support for Financial Institutions

21

     Support for Vendors

21

Related Celent Research

22

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