According to an announcement shared on the company’s LinkedIn page, TransFICC has been launched with FX industry veteran Steve Toland as one of the venture’s founders. He is spearheading the effort that will support fixed income and derivatives markets related technology as well as RegTech needs related to the January 2018 MiFID II regulatory changes.
In addition, the press release described that TransFICC will provide solutions to aid market data throughput and address market fragmentation issues for buy-side market participants in fixed income and derivatives markets, where over a hundred venues could be potential customers.
Products under development
The effort will focus on solving needs related to MiFiD II that banks and brokerages will face within Europe, as an overhaul is expected over the next two years before the updated directives come into effect.
“The team is already building the infrastructure that will support our products.”
Thus, the firm saw an opportunity to provide a solution as companies prepare to make internal changes in order to comply with the upcoming directives, in addition to on-going needs that its solutions could cater to – where there are over a hundred venues in fixed-income and derivatives.
Finance Magnates received the following comments from Steve Toland: “TransFICC has a technology team with significant experience of developing high performance messaging. The team is already building the infrastructure that will support our products.”
RegTech ahead of MiFID II
The solutions were described as built on open-source components that enable high performance messaging, and a Financial Technology (FinTech) solution, where the sub-segment could be within Regulatory Technology (RegTech) with regard to the regulatory compliance-related solutions. However, even removing any upcoming regulatory mandates, the firms business focus would still be relevant within the value it sees that it could provide in the current market landscape. However it sees the regulation related role as an additional timely driver.
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Mr. Toland has a long list of senior sales-related roles including with Market Factory, LMAX, ICAP, Thomson Reuters, and the institutional financial services space.
He is joined by former colleagues from LMAX who now make up the new management team, a quartet that includes three co-founders.
TransFICC co-founder, Tom McKee, brings experience as a developer whilst at LMAX, and with prior roles at Standard Bank, Murex, and Fidessa, as an example.
In response to customer needs
Commenting on the company’s press release, Mr. Toland said: “MiFID regulation will require the Fixed Income and Derivatives markets to have a greater degree of risk control, which needs to operate across all instruments. This requires technology that can provide higher performance, flexibility and scale,” and concluded, “we formed TransFICC in response to banks and the buy-side asking for solutions to these issues and a more flexible business model.”
According to a company description, TransFICC highlights: “In January 2018, MiFID II/R will require the trading, clearing and reporting of Fixed Income and Derivative Instruments to change. Banks and the buy-side will need to update their technology and workflows to meet the new transparency and best execution requirements of MiFID II/R.”
The company name TransFICC implies they are looking to transform fixed income, currencies and commodities (FICC) which is a common segment within interdealer organizations.
As aspects of pre-trade, execution, and post-trade technology needs come into play, including clearing and margin, and all the related EMIR reporting, and current directives and upcoming changes under MiFID II, this space should continue to be an area of interest for both FinTech and RegTech solution providers as well as the companies that will potentially need them.