Fidessa sees revenue growth across all regions in 2017
20 February 2018 London
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Fidessa has reported that its yearly revenue increased by 7 percent for 2017, ending the year with £353.9 million compared to £331.9 million in 2016.
The software provider stated that 66 percent of this revenue was accounted for outside of Europe.
In 2017, Fidessa stated it achieved a £92.4 million cash balance after it totalled net outflows of £10.1 million, which it attributed to its Jersey City office move and dividend payments of £36 million. It also reported it had signed 10 new derivatives deals since January.
In terms of buy side, Fidessa said that firms concerned are now under much stricter requirements to measure execution outcomes and this results in these firms automating more of their order flow.
To meet these demands, Fidessa explained that its approach has been to “meet these needs whilst allowing its customers to share common infrastructure with their other higher touch business lines”, which it said “provides operational efficiency”.
For buy-side trading, Fidessa said it has “expanded its network, via partnerships with regulation reporting vendors, to allow key transactional events to be recorded...as to support forensic investigation by regulators”.
For regulation, especially in Europe, Fidessa suggested it has worked closely with its customers to deliver an extensive second Markets in Financial Instruments Directive (MiFID II) upgrade
programme.
According to Fidessa, the programme provides enhanced controls, increased transparency, regulatory order and trade data, compliance monitoring and systematic internaliser quoting capabilities.
Looking further ahead to 2019, Fidessa predicted that “the gradual reduction in the amount of work required to support regulatory changes and the anticipated improved contribution from the derivatives business is expected to increase Fidessa's ability to invest in further opportunities as the markets develop”.
Fidessa added: “If the right opportunities are not clear Fidessa expects that margin would further increase in 2019.”
Chris Aspinwall, chief executive of Fidessa, said: "Fidessa has worked hard during 2017 to position itself to benefit from these changes. This is reflected in a solid financial performance for 2017 as a whole with a strong and developing pipeline, combined with increasing capacity as we move into 2018/19.”
Commenting on the longer-term outlook, Aspinwall continued: “Looking further ahead, it is clear that technology will play a greater role in financial markets as the impact of new regulation takes effect. It is also clear that increasing numbers of firms are going to need assistance in building out the platforms of the future and Fidessa is already seeing evidence of this within
its pipeline.”
Christian Voigt, senior regulatory adviser at Fidessa, recently published a blog stating that looming double volume caps have impacted trading behaviour. In the blog, he notes that, “despite the caps not being enforced yet, there has been a decrease in the size of dark trading”.
He said: “With great anticipation the industry awaits the announcement of the estimates for the double volume caps, now expected in March. Irrespective of the fact that The European Securities and Markets Authority has already missed one deadline, and with some in the industry waiting to see if there is any substance to a rumoured further delay, it’s evident that the looming caps have already impacted trading behaviour.”
“The double volume caps aim to restrict dark trading, making it less attractive. It’s no great surprise, then, that we’ve seen a decrease in the size of dark trading relative to lit since October 2017.”
The software provider stated that 66 percent of this revenue was accounted for outside of Europe.
In 2017, Fidessa stated it achieved a £92.4 million cash balance after it totalled net outflows of £10.1 million, which it attributed to its Jersey City office move and dividend payments of £36 million. It also reported it had signed 10 new derivatives deals since January.
In terms of buy side, Fidessa said that firms concerned are now under much stricter requirements to measure execution outcomes and this results in these firms automating more of their order flow.
To meet these demands, Fidessa explained that its approach has been to “meet these needs whilst allowing its customers to share common infrastructure with their other higher touch business lines”, which it said “provides operational efficiency”.
For buy-side trading, Fidessa said it has “expanded its network, via partnerships with regulation reporting vendors, to allow key transactional events to be recorded...as to support forensic investigation by regulators”.
For regulation, especially in Europe, Fidessa suggested it has worked closely with its customers to deliver an extensive second Markets in Financial Instruments Directive (MiFID II) upgrade
programme.
According to Fidessa, the programme provides enhanced controls, increased transparency, regulatory order and trade data, compliance monitoring and systematic internaliser quoting capabilities.
Looking further ahead to 2019, Fidessa predicted that “the gradual reduction in the amount of work required to support regulatory changes and the anticipated improved contribution from the derivatives business is expected to increase Fidessa's ability to invest in further opportunities as the markets develop”.
Fidessa added: “If the right opportunities are not clear Fidessa expects that margin would further increase in 2019.”
Chris Aspinwall, chief executive of Fidessa, said: "Fidessa has worked hard during 2017 to position itself to benefit from these changes. This is reflected in a solid financial performance for 2017 as a whole with a strong and developing pipeline, combined with increasing capacity as we move into 2018/19.”
Commenting on the longer-term outlook, Aspinwall continued: “Looking further ahead, it is clear that technology will play a greater role in financial markets as the impact of new regulation takes effect. It is also clear that increasing numbers of firms are going to need assistance in building out the platforms of the future and Fidessa is already seeing evidence of this within
its pipeline.”
Christian Voigt, senior regulatory adviser at Fidessa, recently published a blog stating that looming double volume caps have impacted trading behaviour. In the blog, he notes that, “despite the caps not being enforced yet, there has been a decrease in the size of dark trading”.
He said: “With great anticipation the industry awaits the announcement of the estimates for the double volume caps, now expected in March. Irrespective of the fact that The European Securities and Markets Authority has already missed one deadline, and with some in the industry waiting to see if there is any substance to a rumoured further delay, it’s evident that the looming caps have already impacted trading behaviour.”
“The double volume caps aim to restrict dark trading, making it less attractive. It’s no great surprise, then, that we’ve seen a decrease in the size of dark trading relative to lit since October 2017.”
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