Rob Frost, Chief Product Officer

 

Rob Frost, Chief Product Officer, discusses how recent talk about Wall Street becoming a 24/7 trading zone highlights the importance of developing and implementing technology that solves current problems, but is also sufficiently future proofed.

Waiting for my flight to ‘the city that never sleeps’ the other week, I read this FT article, which asks Is Wall Street ready to stay up all night? My first thought was that, even if the appetite was there, most industry players don’t have the solutions in place to support this.

In the article, Tyler Gellasch, Chief Executive Investor Advocate from Healthy Markets Association says, “Talk 24-hour [trading] and the joke is, I don’t know when our operations guy is going to sleep.”

For Tyler, this tension between manual intervention and people’s sleep creates a barrier to the US equities markets going 24/7. To which I would counter, it need not be so: to paraphrase J. Reuben Clark Jr.’s quip about interest, automation never sleeps.

Moreover, look across to financial industries like digital payments and crypto, which have been virtually 24/7 for some time – so why should equities and fixed income continue to be bound by 20th-century operating models?

Ultimately, Wall Street choosing whether or not to expand to 24hr trading in equity markets (with a short close each day to allow for system updates) hinges on two considerations:

  1. Appetite from traders, and
  2. Firms implementing future-proofed technology.

Future-proofed technology is a ‘Must Have’

First, let’s illustrate this second point through the lens of North America’s shift to T+1, and the recent announcements that the UK, EU and Switzerland will be following suit in 2027.

Even in the last few weeks, ESMA advocated that firms should pursue automation to ensure T+1 readiness, as did the UK’s T+1 taskforce.

Having to adapt to such a development gives firms a choice:

  • Increase headcount to solve the problem;
  • Upgrade to T+1 readiness by undertaking intensive and costly in-house builds; or
  • Adopt an out-of-the-box vendor solution

The fact of the matter is that vendor-solutions, like Pirum’s Recalls Manager and Post Trade Services, effectively dissolve the faster settlements issue, by working already in a future-proofed T+0. And the crux of the matter is that T+1 is a stepping stone: the logical next step for our increasingly digital and globalized industry is T+0.

That’s why our product development has worked on the ‘real time’ assumption for many years – because that’s what modern technology enables.

Just look at other marketplaces, from Amazon to Binance. Or even more familiar corners of finance, from Open Banking to Buy Now Pay Later. In the 21st century, money moves in zeros and ones, and the expectation is instantly.

Looking further from the shoulders of giants

But back to a 24/7 Wall Street – it’s already achievable with existing technology. Our clients currently benefit from real-time settlement gains in efficiency, reduced fails and costs, and improved governance and transparency, as well as real-time enterprise data and intelligence, thanks to the hard work and foresight of our developers.

It’s a bold manifesto for developers from Jeff Patton, but ultimately an accurate one: “At the end of the day, your job isn’t to get the requirements right — your job is to change the world.”

And what about the appetite for 24-hour trading? Granted, it’s not here yet, but I’m confident it will arrive. Sooner than people think. And Pirum is ready. Just like we are for T+0.

To talk with Rob about the benefits of real-time and full life cycle securities finance tech stack, contact us.