TCS Capital Markets Forum | Question time Working on the same page
Panellists further discussed consolidation, the providers, shifting deadlines and who will be left standing.
David Aldrich
providers because of the concentration risk. In the end it will be those which have the scale and the efficiency who will win the battle and there will be a few of them, so there will not be a safety issue.” On the regulatory front, audience members also asked how firms were coping with the changing deadlines? In Mark Higgins’ opinion, “the reality is it has become very hard to actually consider what will happen in six months’ time because what we have learnt, certainly with regulation, is that things change. “The problem is that you actually have the
David Aldrich, Managing Partner, Aldrich Partners, fired the opening gambit by asking, “what is the consensus of the speakers on consolidation within the industry?” Natan Tiefenbrun replied: “We have seen the regulators turn down mergers of NYSE- Deutsche Börse because fundamentally there were concerns over the creation of monopolies. I don’t think that customers are going to support consolidation unless they have real confidence in how these businesses are going to be organised, whether they will have a sufficient seat at the table and that the commercial pricing policies of those organisations give them long-term certainty.” The other aspect of consolidation focuses on
the providers. “What do you foresee?” inquired Giulio Di Cerbo, Chairman of Monte Titoli and CC&G. In answer, Rajen Shah believes there are two different angles to this. “First of all, the regulations have done a very good thing in terms of the amount of collaboration that there is now. The second angle would be the global custody landscape over the last 20 years. You start out with many players who think that there is an opportunity out there. However, you need to have efficiency, but at the same time there can’t be only a few
Best Execution | Spring 2013
regulation sussed and then in a month’s time something else comes up as a bump in the road that says ‘I didn’t see that one coming’, and then you have to change direction.” However, Higgins believes that “one of the key things that the industry has gained, in a human sense, is the collaboration of spirit, thought and an open-minded flexibility. Custodians, buyside or clearinghouses have all come together to discuss what is technically possible, and while there is competition around the edges, it is generally in our combined interest to deliver feasible solutions that will benefit the whole market.” ■
Giulio Di Cerbo
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