Post-Trade Landscape in the US: Leading Global Markets

by Anshuman Jaswal, PhD, December 28, 2015
Industry Trends
North America

Abstract

In the last few years, the US has seen the dominance of incumbent exchanges disappear, giving way to a highly fragmented marketplace with more than 40 trading venues. Such a complex market is quite different from the vertically integrated monopoly trading and post-trade infrastructure we see in a number of countries, especially emerging markets. However, the US market is helped by having a smaller number of post-trade providers. 

In the report Post-Trade Landscape in the US: Leading Global Markets, Celent looks at the evolution of the post-trade environment in the US market. Technology has become the cornerstone of post-trade services. Nowhere is this more true than in the United States, where the leading providers not only cater to the sophisticated requirements of their domestic clients, but also help markets worldwide modernize and grow through the provision of similar services.

Several US post-trade firms are dominant players in their respective fields, and in this report we discuss how they have evolved in the last few years by enhancing their product offerings and technological platforms. The rise in the number of asset classes and new products being served by US central counterparty clearinghouses (CCPs) and central securities depositories (CSDs) has led to growth in their business. Along with the growing importance of multi-asset trading, this has contributed to the increasing complexity.

The investment cycle for these firms has been shortened, and now they have to improve their capabilities more regularly. Regulation has been another factor; a bulk of the investment is going toward meeting regulatory guidelines.

The report begins by discussing the recent trends in the US post-trade services market, then takes a detailed look at the recent development of the CCPs and CSDs operating in the market, including a comparison with some international counterparts. Celent concludes by considering some of the important challenges and the strategies being utilized to overcome them.

“The challenge for the leading providers in the fast evolving post-trade landscape has been to both make the necessary investment that these firms need to survive and succeed, and to provide services that help their clients to streamline their internal post-trade activities,” says Dr. Anshuman Jaswal, a senior analyst with Celent’s Securities & Investments practice and author of the report. “Risk management and collateral management are prime examples of areas in which post-trade providers are working to provide value to their clients.”

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

2

Introduction

3

 

Key Research Questions

4

Market Overview

5

 

Main Trends

5

 

Post-Trade  Landscape

6

Strategic Concerns and Technology Practices

10

 

Future Developments

13

Conclusion

14

Leveraging Celent’s Expertise

15

 

Support for Financial Institutions

15

 

Support for Vendors

15

Related Celent Research

16

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