Introduction

Sell-side firms are accustomed to dealing with ever-evolving regulations and technology, but 2020 took the cake. The pandemic dominated headlines, upended daily life and changed the way sell-side firms work.

Work-from-home policies accelerated the pace of electronification. Sell-side firms have been under pressure to do more with fewer resources in recent years, and electronification and automation have been an integral part of that. The pandemic put even more of a spotlight on the importance of technology as sell-side front office teams faced challenges working from home.

Relatedly, demand has continued to increase for things like automated voice trading. Firms are also increasingly turning to artificial intelligence and machine learning to keep up with the ever-growing volume of trades and request-for-quotes. Using machine learning to automate complicated workflows is a game-changer for sell-side dealers, allowing them to scale their business more efficiently.

While the pandemic temporarily delayed the implementation of some regulations, such as Basel III, policy and regulatory reforms such as MiFID II, FRTB and LIBOR replacement continued. And more change is coming. Policy-makers and market participants are bracing for the next wave of reform, centering around climate change, the pandemic and life after Brexit.

The EU will soon release a revamped sustainable finance action plan, including proposals for a green bond standard and climate disclosure standards. With the EU Taxonomy, companies will be held to a more consistent standard, and investors can assess to what degree their portfolios align with European environmental objectives. Because the disclosure obligations apply to any company offering financial products in the EU, they’re expected to have widespread impact on international reporting frameworks.

The pandemic may soon come to a close, but its impact will linger. In this report, we provide an in-depth look into some of the most salient issues sell-side firms face in this new world. Continue reading the report >>