The AutomatedTrader reported that a London based technology services group SunGard said it had identified 10 trends that are changing the nature of commodities trading as a host of fundamental shifts and other factors such as increased algorithmic trading push businesses to change their processes.
“The growth of electronic and algorithmic trading, intraday price volatility, and new regulations will require firms to change their business processes, especially for processing commodity derivatives,” said Kirk Howell, chief operating officer of SunGard’s Kiodex business unit.
“Geopolitical events, an unclear demand and supply picture, and new activities by central banks -such as unconventional monetary policies like quantitative easing – are broadening the range of potential outcomes and risks for commodities transactions,” he said.
Patrick Reames, managing director at CommodityPoint, said new regulations and consolidation in the industry were big drivers.
“Regulations such as Dodd-Frank in the US and EMIR in Europe are putting huge pressures on commodity trading firms to adapt both their business processes and technology environments,” Reames said.