The past twelve months have been a whirlwind of activity across the post-trade operations industry. From the launch of new services to the rise of cloud adoption and the development of industry initiatives, there have been a number of remarkable developments to keep us busy this past year. Theorem has kept close tabs on the industry, developing our Advisory Services, increasing matching adoption, and white labeling our solutions in order to support our clients and the post-trade operations sector as a whole. In this article, we highlight some of the recent crypto and cloud advancements and the industry initiatives Theorem is proud to be a part of. Here’s to a bright 2023!
This year at Theorem, we’ve…
Launched Advisory Services
We started 2022 by enhancing our outsourced operations capabilities to provide human capital services – thereby providing a trusted resource for organizations that need help running operations on a daily basis, but also organizations that need thought leadership in a consultative fashion. Whether it be for derivative education, strategy formation, or process reimagination purposes, Theorem is a trusted partner to identify target outcomes, map the pathway to success, and manage operational processes.
Increased Matching Adoption
We’ve been focused on increasing the adoption of Theorem’s trade-matching capabilities. As we’ve previously written about in detail, we are strong advocates for intraday reconciliation. Top-day matching prevents inflated margin calls, ensures that investor reporting is accurate, and minimizes delivery risk. In addition, solutions available today help cut down on the back and forth between buy-side firms and their counterparties by enabling summarized break information to be shared and resolved quickly and easily. We’re happy to have increased adoption in 2022 with hedge funds and commodity trading advisors (CTAs) – and are confident that Theorem’s matching solution stands up for the highest volume participants.
White Labeled our Solutions
It’s not only buy-side firms that need process-focused, robust solutions. Sell-side firms, or intermediaries like Futures Commission Merchants (FCMs), and Introducing Brokers (IBs) continue to need to differentiate themselves in a competitive marketplace. Theorem’s reporting and allocation solutions provide avenues for such firms to interact with their client base in a controlled but self-serviced manner – giving clients the tools they need to operate while allowing client-facing teams at sell-side firms to focus on other value-add initiatives. We’re excited to continue exploring opportunities to improve the way that clients submit data (like allocation instructions) and pull information in a comprehensive, yet customizable manner.
Across the industry, we’ve witnessed advancements in…
While we were excited by proposed market structure changes in US derivative markets that may have attracted new participants, we knew that access had to be flexible enough to best suit individual customer needs and circumstances (i.e., continued use of intermediaries). We also applaud the futures industry, who throughout discussions continued to raise the ultimate proven question of “is there a conflict of interest”. Nevertheless, we’re still excited about the potential for certain technologies to improve our industry but would reiterate our previous position that crypto and blockchain aren’t going to solve every problem our industry faces and that such technologies have to be implemented responsibly.
Over the last 18 months, we’ve seen major announcements across CME, Nasdaq, and most recently LSEG around large-scale and impactful cloud partnerships. Traditionally, the financial services industry and more specifically the market segment has been slow-moving when it comes to cloud adoption and migration. With these announcements, the cloud is cementing its place in our segment. At Theorem, we’ve been proponents of private cloud-based solutions since our inception and have partnered with top-tier providers to ensure reliability matches or exceeds the performance of on-prem solutions. We’re excited to continue seeing the broader industry, not just the application layer, adopt scalable and dispersed solutions, which when implemented responsibly improve the efficiency and reliability of our markets.
Industry Initiatives & Working Groups
We’ve been keeping a close eye on industry bodies that are trying to identify common problems, develop standards, and drive change. The more participants understand each other perspectives and challenges, the more we’re going to be able to shape solutions that fit the needs of the industry and promote healthy, reliable, and responsible post-trade operations. We’re excited to participate more formally in these conversations in 2023 and share our unique perspectives across buy-side and sell-side participants.
2022 has been an exciting year for the industry, with new services and product applications on the rise and a renewed focus on technological efficiency and reliability. At Theorem, we are proud to have contributed by launching Advisory Services, increasing matching adoption, and white labeling our solutions. We look enthusiastically toward 2023 and the continued development of industry initiatives and working groups to promote healthy, reliable, and responsible post-trade operations. We appreciate Theorem’s customers, team, and network for making 2022 a memorable year, and are looking forward to 2023. Happy New Year!
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