Regulators to Exchanges: Prepare to Go Hybrid

The world’s securities regulators are considering whether to strengthen exchanges given the high trading volatility demonstrated during the pandemic.

The International Organization of Securities Commissions (IOSCO), the trade group of the world’s securities regulators, released its report, “Operational resilience of trading venues and market intermediaries during the COVID-19 pandemic,” Thursday (Jan. 13), describing the impact of COVID-19 on trading venues and regulated market intermediaries.

In its announcement, IOSCO concluded that these regulated entities largely proved to be resilient and continued to serve their clients and the broader economy, despite unprecedented challenges.

But the coronavirus also introduced challenges, including increased cybersecurity risks, accelerated use of emerging technologies and disrupted outsourcing, according to the announcement.

The group noted in the announcement that many businesses are expected to return to a hybrid mix of employees as they divide time between the office and home.

Researchers found in the report that while much trading is already electronic, the pandemic forced the closure of the New York Stock Exchange (NYSE) trading floor for two months and converted to fully electronic trading to comply with the state of New York’s stay-at-home order. In addition, the London Metals Exchange ring moved to electronic trading in March 2020, but in-person trading resumed in September.

While resilience requirements for exchanges, settlement systems and clearing houses have worked well, there are opportunities to improve, the IOSCO said in the 32-page analysis.

The advocacy group cited the need for more automation, less dependence on documents and manual processes to accommodate people working from home, according to the announcement.

In an interview with PYMNTS, Frank Colich, chief financial officer at Rescale, said two mantras have emerged as he’s built accounting and finance teams over the years.

Read more: Automating Mundane Tasks Frees Finance Teams for Value-Added Projects

One is that they should automate as many of their tasks as they can. The other is that by automating, they can move on to things that will grow the company, be fun to do and make themselves look good.