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FIA Certificate 2017 (The Market, The Data, The Technology, Industry Issues)

Terms in this set (416)

The Trade Lifecycle

Order initiated and execution (Front Office), Risk management and order Routing (Middle Office) Order Matching and conversion into trade (Front Office) clearing and Settlement (Back Office)

Legal contract between two counterparties - a seller and buyer

Pre-Trade Price Investigation

Shopping for bids

Trading Venue Selection - the Trade

Front Office: determining which exchange the security will be bought or sold

Post-trade confirmation

Middle Office: Trade validation, confirmation - risk management processes (following industry regulations and compliance rules)

Trade Reporting

Middle Office: Return execution reports back to sales trader to client

Post-trade clearing and settlement

Back Office: clearing and settlement (exchange of funds/assets)

Primary/Capital Markets

Companies, government & other organizations that raise capital by issuing securities. Investors buy directly from these organizations.

Secondary Markets

Permit investors to buy and sell existing instruments with other investors.

Where market condition in which securities prices are falling or expected to fall (widespread pessimism causes the stock market's downward spiral to be self-sustaining).

Market conditions in which securities prices are rising or are expected to rise.

A long (or long position) is the buying of a security such as a stock, commodity or currency with the expectation the asset will rise in value.

A short position is the sale of a borrowed security, commodity or currency with the expectation that the asset will fall in value.

Includes preferred and common stock. Additionally ETFs (exchange traded funds) and CFDs (contracts for difference)

Contract for difference (CFD) is a contract between two parties, typically described as "buyer" and "seller", stipulating that the seller will pay to the buyer the difference between the current value of an asset and its value at contract time (if the difference is negative, then the buyer pays instead to the seller).

Exchange Traded Funds - type of investment fund that is traded on a stock exchange - tracks an index, commodity, bonds or a basket of assets like and index fund.

Fixed Income Instruments

Loan that pays predetermined (fixed) interest (income) such as Short Term - bills, notes, CDs and Long Term - bonds, government - treasury, municipal, corporate, supra national, zero coupon

Short Term Money Markets

Certificates of Deposit (CDs), bankers acceptances, commercial paper, repurchase agreements (repos)

Interest rate swaps, interest rate options, basis swaps forward rate agreements (FRAs)

Spots, Forwards, non-deliverable forwards, currency pairs, swaps, pips, cross currencies

Commodities & Energy

Softs, precious metals, oil, electricity, power

Soft Commodities

A commodity such as coffee, cocoa, sugar and fruit. Generally refers to commodities that are grown, rather than mined.

Energy Commodities

Typically refers to trading in oil, natural gas, coal or green energy. Investing in the energy market can mean purchasing the commodity itself to profit from the oil price changes or taking part in the import and export of the commodity for a profit.

Futures & Options

Obligations - A futures contract gives the holder the right and the obligation to buy or sell financial, currency and commodity securities. Options contracts gives the buyer the right but not the obligation.

Where Futures & Options Trade

Chicago is the epicenter of derivatives (CBOE, CME)

Futures & Options "Greeks"

Refers to risk modeling of options. Greeks are dimensions of risk involved in taking a position in an option or other derivative.

Credit Derivatives

Credit default swaps collateralized Debt Obligations

Structured Products

Pre-packaged investment strategy based on derivatives, such as a single security, a basket of securities, options, indices, commodities, debt issuance or foreign currencies, and to a lesser extent, swaps

Asset backed securities - securities secured/backed by - loans, leases, credit card debt, company receivables

Mortgage Backed Securities - same as ABS but backed by mortgages

Collateralized Debt Obligations

Broker, Dealers, and Investment Banks; defined as retail brokers and research departments that sell securities and make recommendations for brokerage firms' customers.

Investment Banks

A bank that purchases large holdings of newly issued shares and resells them to investors

Commercial and retail banks

A bank that offers services to the general public and to companies

Financial organization that acts as a middleman between two parties in a financial transaction. (e.g., commercial banks, investment banks, mutual & pension funds). Benefits of using an intermediary - safety, liquidity and economies of scale.

Retail Brokerage

Brokerage that deals with retail (small or individual ) investors

Online Brokerage

No brick and mortar - online only (eTrade, Scottrade).

Pension funds, Hedge Funds, Portfolio Managers, and Insurance Firms; defined as the side of Wall Street comprising the investing institutions that tend to buy large portions of securities money-management purposes. (Long only money managers cannot short sell securities)

Long Asset Management

Investment strategy that involves buying long equities that are expected to increase in value

Source of funds belonging to numerous investors to collectively purchase securities can be established for any purpose

A fiduciary arrangement that allows a third party to hold assets on behalf of a beneficiary.

Limited partnership of investors that uses high risk methods in hopes to realize large capital gains.

Sponsor creates the underlying index which the ETF will be based on.

Equity Exchanges

Venues to trade equity instruments (e.g., common, preferred stocks) Examples of exchanges - NYSE, NASDAQ, ASX (Australian), LSE (London)

Commodity Exchanges

Venues to trade commodities and related securities such as futures (e.g., CME, MGE, LME)

Systems/programs that trade based on rules to execute and monitor trades.

The floor where trading activities are conducted.

An alternative trading system (ATS) is a trading system that is not regulated as an exchange, but is a venue for matching the buy and sell orders

Swap Execution Facility - enables many participants to execute or trade swaps.

Numbering Agencies

Organizations in each country for issuing securities identification numbers (ANNA, S&P CUSIP/CINS , LSE SEDOL, Valoren

Transfer Agents/Clearing Agents

A transfer agent is a trust company, bank or similar financial institution assigned by a corporation to maintain records of investors and account balances.

Key Regulatory Bodies

Federal Reserve Board, Federal Deposit Insurance Corp, Commodity Futures Trading Commission (CFTC), Securities and Exchange Commission (SEC)

Manage a countries currency, money supply and interest rates. Also oversees commercial banking system. - Federal Reserve (Fed), Bank of England, Bank of Japan.

Key Laws and Regulations

RegNMS (2005), Order of Protection Rule, Access Rule, Sub-Penny Rule, Market Data Rules (600,601,603) Dodd-Frank, Sarbanes Oxley, EU and MiFID

Regulation of the national market system, set of rules proposed by SEC to modernize and strengthen the regulatory structure of the US equity market. Topics (BestEx (NBBO), Sub Penny Rule (MPV>$.01)

Order Protection (or Trade Through) Rule

Provides intermarket price priority for quotations that are immediately and automatically accessible (Rule 611)

Addresses access to market data such as quotations (Rule 610)

Establishes minimum pricing increments (Rule 612)

Market Data Rules

Allocation amendment - institutes a new Market Data Revenue Allocation Formula b) Governance amendment - creates advisory committees, c) Distribution and Display Rules - governing market data (Rules 600, 601, 603)

Dodd-Frank (July 2010)

Too big to fail, Volker rule (limits bank risk, e.g., prop trading @ banks) created Office of Financial Research - formed to improve the quality of financial data available to policymakers and facilitate more robust and sophisticated analysis of the financial system.

Sarbanes Oxley (SOX)

Regulations on modernizing company accounting practices

European Union and MiFID (Nov 2007)

MiFID Markets in Financial Instruments Directive - designed to bring uniform (across EU) transparency. Topics: Systematic Internalization, pre-post trading transparency. Best execution, multilateral trading facility (MTF)

Basel I, II, III

Deliberations by central bankers from around the world and in 1988 the Basel Committee (BCBS) in Basel, Switzerland, published a set of minimum capital requirements for banks. This is also knows as the 1988 Basel Accord, and was enforced by law in the Group of Ten (G-10 countries) in 1992. Basel I is now widely thought to be outmoded. Basel II is a more comprehensive set of guidelines and updated by Basel III.

Published a set of minimum capital requirements for banks (1988)

Amend international standards that control how much capital banks need to hold to guard against operational risk.

Response to the deficiencies in financial regulation and intended to strengthen bank capital requirements by increasing bank liquidity and decreasing bank leverage

Venue where trades are done

Securities Research

Area of investment organization that researches and publishes research on securities held or traded by that organization

Portfolio Management

Making decisions about investment mix for a portfolio of securities (matching investment objectives to a portfolio)

Risk Management

Three kinds of risk - Operational (systemic), market (liquidity) and credit (valuation)

Settlement and Clearing

Function where transactions are settled

Securities Lending

Loan securities to a firm/investment company that requires the borrower to put up collateral.

Corporate Actions

Events that brings material change to a company and its stockholders (FI and Equity). M&A, Dividends, C-Level changes.

Performance and Attribution

Evaluation of portfolio or fund managers - attribution analysis uncovers the impact of the manager's investment decisions against policy/allocation/security selection and activity (is the manager good or just lucky)

Automated Execution Services (Algo)

Executing trades with no manual intervention, but based on technical indicators and rules.

Revenue generating role - trading, sales, brokering

Manages the risk of trades until settlement. All verifications of trade done.

Settlement and clearing process (netting trades and all supporting activities). Fund/asset exchanges.

Individual engaged in buying and selling securities/assets (for themselves or on behalf of others)

Sales agent for firms - identify trends in the market and providing market color to clients

Portfolio Manager

A person who makes investment decision using money other people have placed under their control or manages a financial institutions asset/liability portfolios

Trader vs. Broker

Brokers and traders both purchase and sell securities. Brokers are also sales agents, either on their own behalf or for a firm. Traders buy on the wishes of a portfolio manager(s) at an investment firm

Quantitative Analyst - economic, business or financial analyses that looks to understand or predict behavior/events using mathematical measurements, modeling

Buy or sell for person accounts.

High-level professional/service that combines financial and investment advice, accounting and tax services, retirement planning, or estate planning (usually for one fee)

Financial Advisor

Provides financial advice and guidance to customers for compensation from investment management to tax and estate planning. Must have Series 65 license.

To identification analysis and acceptance or mitigation of uncertainty in investment decisions

Compliance Officer

Responsible to ensure the company complies with its outside regulatory requirements and internal policies.

Contributed Data

Content that is not derived from the market data

Major Data Contributors

Sell-side investment desk contribute OTC prices, loan information, fund information, sell-side research, M&A transaction information

Who Owns contributed data

Contributor unless otherwise agreed upon between the Distributor and Contributor

Contributed Data and Market Manipulation

Strategically placed contributions can promote directional price movements could be used to manipulate the market

Content derived from exchanges Level 1 (bid/ask) or Top of the Book and Level 2 Full Order Book (FOB)

Exchanges allow and charge firms to locate servicers on site with exchanges to enable a shorter time to collect and distribute the exchanges content (low latency)

Direct and Indirect Distribution

Direct distribution - straight from the exchange/source, indirect distribution - via third party

Vendor Generated Data

News, commentary, analytics, indices and other derived benchmarks

Data Aggregator

Vendors/Redistributors that onboard and many direct/indirect sources. Provide as aggregated services to firms. The content may include value added benefits and normalization.

Vendor Added Value

When vendors add additional value through things like normalization/standardization, commentary, quality checking, derived works, aggregation

Vendors (Providers)

Key Vendors: Exchanges, Bloomberg, Thomson Reuters, Factset, Markit, IDC/ICE

Vendor Content Delivery

Vendors deliver content via internet, desktop, ftp/custom feeds, email

Contractual obligations/rules and restrictions that govern the use of the data

multilateral trading facilities/alternative trading systems (what do they deliver)

Inter-Dealer Brokers - Firms/individuals that act as intermediary between major dealers.

Regional Vendors

Vendors/redistributors that collect/create/distribute content that is specific to that region. (e.g., local exchanges, economic, company information providers)

Specialist Vendors

Vendors that provide specific services focused on a narrow area of specialism (Commodities, Ratings)

Corporate Actions

Event that brings material change to a company and its value to stockholders (M&A, product launch, c-level changes, etc.)

Fundamental Data

Information from financial statements, balance sheet and reports (e.g., revenue, sales P/E, etc.)

Target and acquirer profiles, deal terms, financial and legal advisor assignments and fees, deal value, stock premiums, synopsis and event history, deal status, financial information on target and acquirer, financial sponsors, investor group detail, purchase and pooling accounting, attitude of the seller board to bid and more

Information about a company - name, address, structure, officers, revenue, sales, hierarchy (parent vs. children vs. sibs)

Corporate social responsibility data

Holiday calendars

Calendars that coincide with market closes. Tend to be regional to reflect national and religious holidays.

Financial Reports, Filings, Annual Reports SEC filings Stock Information, Buy/Sell Commentary

Information from financial institutions (exchanges), regulatory bodies, specialty companies - any content that affects and/or reflects the movement in the market

market data is price and trade-related data for a financial instrument reported by a trading venue such as a stock exchange. Market data allows traders and investors to know the latest price and see historical trends for instruments such as equities, fixed-income products, derivatives and currencies.

The members of a specific group - e.g., indices, constituents are the company members of the index.

Level 1 and Level 2 Data

Level 1: Bid/Ask - TOB (Top of Book), Level 2: FOB (Full Order Book), DOB (Depth of Book)

Electronic list of buy and sell orders for a specific security/instrument

Highest quoted bid for an instrument out of all offered.

Frequency of Data

How often the information is released (real-time/tick by tick, intra day, end of day, weekly, monthly, quarterly)

Real-time/Delayed Data/Snapshot

Streaming in Real-time, embargoed/delayed by a specified amount of time (e.g., 15 seconds, or 15 mins would be delayed) Snapshot - a point in time.

Tick = measure of the minimum upward or downward movement in the price of a security.

Volume Weighted Average Price

Selectively reduce least valuable data elements

Content that is derived based on market factors, similar data, and market color

How often information is updated (streaming, tick by tick, intra day, daily, EOD, etc)

How much time it takes data to get from one point to another

Data redundancy is a condition created within a database or data storage technology in which the same piece of data is held in two separate places. This can mean two different fields within a single database, or two different spots in multiple software environments or platforms.

Symbols that are unique and represent a securities, entity or other unit (e.g., CUSIP, ISIN, Valoren, SEDOL)

Fundamental Data

looking at any data, besides the trading patterns of the stock itself, which can be expected to impact the price or perceived value of a stock. As the name implies, it means getting down to basics.

Econometric Data

Economic data (micro/macro) Time series, cross section and combined/pooled data

Historical/Time Series Data

Information that goes back in time (not the most current). Forms a timeline (time series) - Important for back testing

Intraday, Interday and EOD

Intraday = within the same day, interday = over a period of days, EOD = End of Day

Example of Historical and Time Series Vendors

Factset, IDC/ICE, Thomson Reuters

Valuations Data

Determining the worth or value of a security based on market factors/color

Evaluated pricing

Using the valuations data, produce prices for instruments that do not trade on an exchange)

Mark to Market or Model

Mark to Market - or fair value accounting refers to accounting for the fair value of an asset or liability based on the current market prices of the asset or liability. Mark to Model refers to the practice of pricing a position or portfolio at prices determined by financial models as opposed to the market determining the prices.

Examples of Evaluated Pricing Vendors

Thomson Reuters, IDC/ICE

An assessment of the credit worthiness of individuals and corporations. It is based on the history of borrowing and repayment, as well as the availability of assets and extent of liabilities

Credit Ratings Agency Data

Credit Ratings in Structured Finance

Ratings play an important role in structured finance for instruments that are meant to be sold to investors. Many mutual funds, governments, and private investors only buy instruments that have been rated by a known credit rating agency, like Moody's, Fitch or Standard & Poor's

Ratings Agencies

Moody's, S&P, Fitch + regional or specialized agencies

Statistical measure of change in a securities market (stock and bond market indices) and consist of a hypothetical portfolio of securities representing a particular market or a segment of it

Index Constituents

The member companies that make up the index (e.g., the 500 companies in the S&P 500 index)

Index Constituent Weightings

The weight that each individual constituent has on the overall indices based on market cap.

Vendors that Produce Benchmark Indices

FTSE Russell, MSCI, S&P Dow Jones Indices

Importance of Classification Standards

GICS (joint venture of S&P and MSCI), ICB (FTSE Russell), NAIC

How Indices are Licensed

Real-time/delayed prices/levels via exchanges (e.g., CME distributes S&P DJI indices), EOD levels- license fee, EOD ICW (constituents, shares, weights) - typically pass though, directly billed by index provider.

Standard vs. Custom Index

Standard Indices are used across the industry (e.g., S&P 500, DJ 30, FTSE 100, sectors). Custom are made for a specific client, or portfolio, or ETF.

Example of Index Vendors

MSCI, S&P Dow Jones, FTSE

News vs. Commentary Data

Something happening in the world (and event). Commentary is opinions on that event.

AP, Dow Jones, Reuters, Bloomberg

News & Algo Trading

Using world/corporate news/economic events that spur market movement with algo programmatic trading

News Sentiment Feed

Process of computationally identifying and categorizing opinions expressed in a piece of text (Machine Readable News)

Roll of Social Media

Provides real-time insights into news, events, markets. Quick research/opinions often crowd sourced.

Reference data are data that define the set of values to be used by other fields security pricing will defined by reference data - description, any information used to settle a transaction.

Is Reference Data Static

Most is static - historically batch downloads, monthly, weekly, etc. (except when there are revisions).

Securities Master File

Database of all known securities that a portfolio management or reporting system has encountered in the course of operations. (Universe of Securities) Can be as simple as a very large text or Excel file to a complete relational database with multiple tables and advanced features.

Enterprise Data Management (EDM)

Data that is shared and management by the users of an organization, generally across departments and/or geographic regions

Final copy of a database of information

Consolidated Tape

High speed electronic system that constantly reports the latest price and value data on sales of exchange listed stocks.

Data Governance

Over all Management of the availability, usability, integrity and security of the data employed n an enterprise - usually run by compliance teams to adhere to agreements and/or regulator requirements

Data's origin and where it moves over time (needed to trace back errors to their source)

Security Identifiers

Instruments with identifier codes issued by various clearing houses or agencies (e.g., ANNA, S&P CUSIP, LSE SEDOL)

Number Agencies

S&P - CUSIP, CINS, CUSIP based ISINs, ANNA - ISINS, Swiss - Valoren

Security Instrument Terms and Conditions

Terms & Conditions for an Instrument like coupon rate

Securities Identifiers

Unique identifier for a specific securities (e.g., Ticker, CUSIP, ISIN)

Proprietary Symbology Providers

Symbology that is owned by a specific company - RICs (Thomson Reuters), CINS/CUSIPs/ISINS (S&P and ANNA), DUNs (D&B), SEDOL (LSE),

Corporate Hierarchies

Arrangement of individuals within a corporation or entity (Board - CEO - Other C levels - downward)

Ultimate Parent

The company that controls other companies by owning an influential amount of voting stock or control.

The entity that develops, registers and sells securities to raise capital - may be corporation, trusts or governments. Responsible for the obligations of the issue and reporting financial conditions.

The other side of the deal.

Know Your Customer (procedures, laws and regulations designed to stop the practice of generating income through illegal actions.)

Anti Money Laundering

Client On boarding

Process by which clients are brought onto your system

Legal Entity Identification code

Corporate Actions

Action or event that affects the price of a stock/bond/security

Effect on Time Series

Time series need to be adjusted for

Factset, IDC/ICE, Thomson Reuters

Social Media data and analytics provide additional insight and market research, news covering industry trends, sentiment, market color - used in value-chain analysis, big data, evaluated pricing to name a few.

News, sentiment, commentary

Facebook & Data

Collection of content by Facebook on human social behavior as well as gather sentiment and news sources

International Organization for Standardization (Independent, non-governmental international organization with a membership of 163 national standards bodies)

Du Jure vs. De Facto

De Jure: expression that means "concerning law" vs. De Facto: which means "concerning fact". De jure = "legally", De facto = "in fact".

Bank Identification Code also knows as ISO 9362 code, SWIFT code

Classification of Financial Instruments CFI (ISO 10962)

Defines the structure and format for classification of financial instruments approved by the ISO

Financial Instruments Global Identifiers FIGI

Bloomberg codes available through open website (www.figi.com)

MIC (ISO 10383)

Market Identifier Code to identify stock markets and other trading exchanges globally

ISIN (ISO 6166)

International Securities Identification Number to identify specific securities issues

ISO Currency Standards

ISO 4217 to establish international standard of currency codes.

Messaging (ISO 15022 and 20022)

Set standards for messaging used in transactions between financial institutions

Desktop Functionality

Real-time/delayed/EOD prices, fundamentals, calendars, based on asset class variants - display screens, analytics downloading features - excel/ape

What other Functionality is available via Desktop

Streaming Datafeeds

Datafeeds from vendors or direct sources (e.g., exchanges) that supply a feed which streams information in real-time (or near real-time) to feed enterprise databases/applications/algo trading.

Different Types of Datafeeds

Real-time/delayed/EOD - Exchange pricing

Batch Downloads

Downloading to a database (from Desktop API or direct from source) that is done in groups (or batches) as a specific time.

Job Functions (see other)

Trader, Sales, Research, Compliance, Portfolio Manager, Clearing and Settlement, Risk Management, Wealth, Retail Broker

Asset Classes (how they use)

Fixed Income, Equities, Commodities, Money Markets

Type of Firms (see other)

Long Only, Investment Banking, Brokerage, Hedge fund, Retail Brokers, Online Brokers

Local Applications

Excel (RT adapters), in house software, software purchased for a specific purpose.

Name Central Shared Applications

Pricing Engine, Trading Systems, Portfolio Systems, Clearing and Settlement, Data Storage, Backtesting

Enterprise Deals

Content licensing across and organization

Volume Discounts

More content that is licensed (or consumed) results in lower prices per unit - volume discounting

Contracts that span across companies with locations around the globe

Alternative Pricing Models (AUM)

Payper view, Unit based, Free (license fee), fee liable (customer pays)

Non Display Usage

Use of content internally in an application (not just displayed) or to create other content

Most Favored Nation

Relates to finance whereby a buyer would receive the best price from a seller

including new original works

Revend or sell content or derived data that is licensed.

practices and issues

Pro vs. Non-Pro

Professional (institutional users) vs. Non-Pro (retail)

Multiple Instance Single User

Multiple Entitlement Single User

Assets Under Management

Commercial terms between the vendor and client, or source and client/vendor which govern the use, restrictions and reporting requirements of the licensed data

Conformity in complying with commercial requirements (you are in or out of compliance)

Data Access Controls - Thomson Reuters permissioning and entitlement system

Data Access Declaration - for reporting purpose with an audit trail

Data providers may request to audit a client's use to ensure all market data restrictions are being adhered to and content is not going out to end-users not fully licensed or to end users who may redistribute the data.

Inventory Management

Tasked with keeping track of which services/application/products are being used and by whom

Usage Reporting

Many exchanges and providers require reporting of usage (what end users have access to the content or are permissioned to use)

Business Analyst

tasked with liaising with end users to find out what their data requirements are

Procurement- Vendor Relations Management

tasked with negotiating the best deals with a vendor and maintaining collaborative information exchanges

Administration (including Billing/Invoicing)

tasked with processing and tracking contracts and invoices

Financial Analyst

tasked with more details financial analysis of ongoing and future purchasing

Inventory Management

tasked with keeping track of which services are being used and by whom

Contracts Management

specialized task of keeping track of contracts and associated terms and conditions for compliance and reporting

Compliance Exchange Management

specialized task of staying on top of the complex rules that exchanges impose on the use of their data

Chief Data Officer

Responsible for all things Data in an organization (C level)

Data Governance

with compliance manages the rights and obligations of the content use across products and to clients.

Software System Development

tasked with looking after existing software and systems

Support and Maintenance

tasked with looking after existing software and systems

Software/Systems Development -

tasked with creating new software and systems (as opposed to buying them from a supplier).

tasked with educating users on the functionality and content of services

Customer Support

tasked with responding to specific problems or request from customers - email telephone

Account Manager

tasked with managing the relationship with the customer which would include either increasing revenues or maintaining them

New Business - Sales

generating new revenue - from existing and new accounts

Product Development

tasked with actually developing a product/service (as probably defined by Product Management)

Product Management

tasked with managing a product or service as a business. Including collecting and recording market requirements as well as understanding the P&L, economics of a given product.

the machines, wiring, and other physical components of a computer or other electronic system.

Logic circuitry that responds to and processes the basic instructions that drive a computer.

memory refers to the computer hardware devices involved to store information for immediate use in a computer

disk, tape, USB/memory stick, SAN)

Network interface card - is a computer circuit board or card that is installed in a computer so that it can be connected to a network

Keyboard, video and mouse

Field Programmable Gate Array - is an integrated circuit designed to be configured by a customer or a designer after manufacturing - hence "field-programmable".

Telecoms Turret

A telecom turret or trading turret or dealer board is a specialized telephony key system that is generally used by financial traders on their trading desks.

Operating Systems

Windows, Unix, Linux, MAC (Apple)

MS Excel, Functions, DDE RTD, Macros, VBA

Structured Query Language (SQL) and Database Queries

Custom Applications

Application developed in-house or customized for a specific client

Browser, Messaging, email

a program with a graphical user interface for displaying HTML files, used to navigate the World Wide Web.

Messaging, email

Used to connect buy-side sell-side communications/trades - common Thomson Reuters messaging, Bloomberg messaging.

Software/firmware

Although software is an umbrella term that refers to anything data stored in hardware, in general practice, it usually refers to programs that you run on a device like a computer or PDA. Firmware still falls into this category as it is programmed information that is responsible for the operation of certain hardware.

Programming Languages

C, C#, .NET, Java

Programming Scripting Language

Application Programming Interface - a set of subroutine definitions, protocols, and tools for building application software.

FPGA/hardware acceleration

Use of computer hardware to perform some function faster than is possible in software running on the general purpose CPU. Examples of hardware acceleration include blatting acceleration functionality in graphics processing units (GPUs) and instructions for complex, operations in CPUs)

Apppache Hadoop software library - allows for distributed processing of large data sets across clusters of computers

Distributed computing

Computer components located on a networked computers communicate by passing messages, interacting to achieve a common goal.

Computer network that computer's resources are shared with every other computer system - everything is community resource.

Cloud Computing

the practice of using a network of remote servers hosted on the internet to store, manage, and process data, rather than a local server or a personal computer.

Extremely large data sets that may be analyzed computationally to reveal patterns, trends, and associations, especially relating to human behavior and interactions.

Quantum Computing

Quantum computing studies theoretical computation systems (quantum computers) that make direct use of quantum-mechanical phenomena, such as superposition and entanglement, to perform operations on data. Quantum computers are different from binary digital electronic computers based on transistors.

Deployed/Hosted

Deployed service is done at the customer site - hosted service is managed by another organization and can be cloud based.

Point to point, multicast, broadcast

a number of interconnected computers, machines, or operations

transmission control protocol/Internet protocol, used to govern the connection of computer systems to the Internet

A route from one place to the next without stopping or changing - e.g., telecommunications or computer link directly from or to sender/receiver

send (data) across a computer network to several users at the same time

transmit information

Transmission medium

copper, fiber optic, satellite, microwave

Network/communications hardware

Hubs, switches, routers, modems, firewalls

Telco Providers

Telecommunications provider - British Telecom (BT) big in trading space

A leased line is a private bidirectional or symmetric telecommunications line between two or more locations provided in exchange for a monthly rent.

Virtual Private Network - extends your companies network across public networks.

an intranet that can be partially accessed by authorized outside users, enabling businesses to exchange information over the Internet securely

software that acts as a bridge between an operating system or database and applications, especially on a network

Bandwidth, Throughput

the transmission capacity of a computer network or other telecommunication system

Hosting, Data Center

Store (a website or other data) on a server or other computer so that it can be accessed over the Internet

A collocation (cool) is a data center facility in which a business can rent space for servers and other computing hardware. Often used by exchanges who allow companies and vendors to co-locate servers to minimize latency.

Managed Service

A managed services provider (MSP) is most often an information technology (IT) services provider that manages and assumes responsibility for providing a defined set of services to its clients either proactively or as the MSP (not the client) determines that services are needed.

nearness - how close your servers might be to the source of the data

Resilience and fail-over

a method of protecting computer systems from failure, in which standby equipment automatically takes over when the main system fails

the delay before a transfer of data begins following an instruction for its transfer.

The ability of a computing process to be used or produced in a range of capabilities (how fast can it grow)

Aggregated Consolidated Feed

Combines multiple sources/information types into one feed

utilizing a vendor's off-site IT infrastructure. This infrastructure typically includes servers, storage, networking, backups, maintenance and supporting software.

renting space on the vendor's equipment. (allows you to be located closer)

Throttling, pulsed, intervalized

Throttling - method of reducing the messages in a network when information exceeds capacity. Pulsed - short bursts information. Intervalized - systematically timed to send content/information in set intervals.

Snapped, Streaming delayed, real-time EOD

Snapped = point in time, Streaming delayed - real-time with specific time delay (e.g., 15 seconds for many exchanges), Real-time = near live, EOD= End of day

Selectively delete portions of data on a feed to permit information to fit bandwidth

Push/pull Technologies

Servers push data to client, vs. client pulling content proactively.

Pub/Sub mechanism

The publish-subscribe messaging pattern (pub/sub) where senders of messages (publishers), do not program the messages to be sent directly to specific receivers (subscribers).

FIX, FAST, ITCH, XML

Market Data Distribution System - core components are: feed handler, cache, distributor, WAN gateway

Entitlements that can be granted to an end user of market data

Core Components of MDDS

Feed handler, cache, distributor, wan gateway

Enterprise Data Management Systems

Types of Market Data difference consumers need

Algo apps tick capture engines

Fat vs. Thin Client Technology

Thin clients run an operating system locally and carry flash memory rather than a hard disk. Since it has no hard drive or local storage, all applications and data are stored on a central server, but advanced thin client technologies help users still experience the same look and feel as on a PC. (Virtualized Desktop - Citrix) Thick clients(also called a fat client) is one that will perform the bulk of the processing in client/server applications.

Key workstations in the Market

Eikon, Bloomberg, Factset, CapIQ, IDC/ICE

Mobile Devices - connected to Desktops

Many Key workstations allow for additional access via mobile devices for subscribing clients

Instant Messaging/Chat - ways traders communicate

Primary Providers of IM

Thomson Reuters & Bloomberg

Transaction Products

Charting and technical analysis

Candlesticks - price chart that displays the daily high, low, open, and close for a security over a specified period

Risk Management

The forecasting and evaluation of financial risks together with the identification of procedures to avoid or minimize their impact.

Trading Systems

Order Management System - electronic system developed to execute securities orders in an efficient and cost-effective manner. Brokers and dealers use OMSs when filling orders for various types of securities and are able to track the progress of each order throughout the system. Execution Management System- software applications utilized by institutional traders designed to display market data and provide seamless and fast access to trading destinations for the purpose of transacting orders

Smart Order Routing

Smart order routing (SOR) is an automated process of handling orders, aimed at taking the best available opportunity throughout a range of different venues. Offered from sell side to buy side. (DMA - Direct Market Access)

Algorithmic Trading

Trading based on mathematical modeling and processing large datasets

Messaging Systems

Thomson Reuters, Bloomberg, Symphony

Complex Event Processing

Combines data from multiple sources to infer events or patterns that suggest more complicated circumstances. The goal of complex event processing is to identify meaningful events (such as opportunities or threats) and respond to them as quickly as possible

Tick Capture Systems

Products that allow for the capture of tick by tick pricing for analysis and to store and access tick history

Latency metrics

Refers to the amount of time (usually measured in milliseconds) it takes for data to travel from one location to another across a network (or across the Internet, which is a network itself).

System Development

Change Management

The development and management of process to identify, coordinate and c communicate changes to software/technology.

Project Management

Project management is the discipline of initiating, planning, executing, controlling, and closing the work of a team to achieve specific goals and meet specific success criteria

It is important when a change has been rolled out and there are issues, that you can "fall back" to an earlier version of the software in order to work out the implementation issue

Backward Compatibility

Backward compatibility is a property of a system, product, or technology that allows for interoperability with an older legacy system, or with input designed for such a system, especially in telecommunications and computing

Importance of incident and problem management

Important to understand root cause of problem and track issues in order that clients are not disrupted - real-time (or at any frequency). Immediate affect with these problems.

Impact of system failure

Important to know your end user base and how they use the content/technology in order that they are not affected (or can be minimized and how to communicate) when there are issues

Business Continuity and Disaster Recovery

All vendors and clients have plans to enable them to continue BAU in the face of unexpected and unavoidable system failures (e.g. weather outages, political unrest, etc)

Foreign Account Tax Compliance Act -is a 2010 United States federal law to enforce the requirement for United States persons including those living outside the U.S. to file yearly reports on their non-U.S. financial accounts to the Financial Crimes Enforcement Network (FinCEN)

Systems Compliance and Integrity - is a set of rules created by the United States Securities and Exchange Commission to monitor the security and capabilities of U.S. securities markets' technological infrastructure

January 3, 2005 that seeks to update legislations concerning short sale practices. Regulation SHO established "locate" and "close-out" standards that are primarily aimed at preventing the opportunity for unethical traders to engage in naked short selling practices

Role of supra-national regulators (ESMA) and national Regulators

ESMA - is an international organization in which member states transcend national boundaries or interests to share in the decision making and vote on issues pertaining to the wider grouping. National regulators - focus on their state/countries regulations.

Role of multilateral Trading Facilities

is a European regulatory term for a self-regulated financial trading venue. These are alternatives to the traditional stock exchanges where a market is made in securities, typically using electronic systems

What is market fragmentation

Market fragmentation is the concept that all markets are diverse and composed of different segments, reflecting different needs, wants, responses to marketing messages, and behavior. These many segments that characterize all markets are indicative of the fragmentation of these markets

Best execution refers to the duty of an investment services firm (such as a stock broker) executing orders on behalf of customers to ensure the best execution possible for their customers' orders

European Consolidated Tape

An electronic program that provides continuous, real-time data on trading volume and price for exchange-traded securities in European markets

EU Competition Law

European competition law promotes the maintenance of competition within the European Union by regulating anti-competitive conduct by companies to ensure that they do not create cartels and monopolies that would damage the interests of society

Alternative Investment Fund management Directive -is an EU law on the financial regulation of hedge funds, private equity, real estate funds, and other "Alternative Investment Fund Managers" (AIFMs) in the European Union

European market Infrastructure Regulation -is a body of European legislation for the regulation of over-the-counter derivatives. ... The objective of the legislation is to reduce systemic counterparty and operational risk, and help prevent future financial system collapses.

as subsequently amended is a European Union law that provides harmonized regulation for investment services across the 31 member states of the European Economic Area (the 28 EU member states plus Iceland, Norway and Liechtenstein).

Markets in Financial Instruments Directive II - is the EU legislation that regulates firms who provide services to clients linked to 'financial instruments' (shares, bonds, units in collective investment schemes and derivatives), and the venues where those instruments are traded.

Market Abuse Directive I and II - addresses abusive behavior by new technologies

Directive in European Union law that codifies and harmonizes the EU insurance regulation. Primarily this concerns the amount of capital that EU insurance companies must hold to reduce the risk of insolvency.

International Financial Reporting Standards (IFRS) is a set of accounting standards developed by an independent, not-for-profit organization called the International Accounting Standards Board (IASB). ... A single standard will also provide investors and auditors with a cohesive view of finances

Hong Kong Regulators

Hong Kong Monetary Authority (HKMA), Hong Kong Securities and Futures Commission (SFC)

Australian Regulators

"The Australian Competition and Consumer Commission (ACCC) ...

The Australian Prudential Regulation Authority (APRA) ...

Australian Securities and Investments Commission (ASIC) ...

Australian Securities Exchange Limited (ASX) ...

Australian Taxation Office (ATO) ...

Foreign Investment Review Board (FIRB)"

Singapore Regulators

Monetary Authority of Singapore (MAS)

Japanese Regulators

The Financial Services Agency (金融庁 Kin'yū-chō) is a Japanese government agency and an integrated financial regulator responsible for overseeing banking, securities and exchange, and insurance sectors in order to ensure the stability of the financial system of Japan

Debate on IP Rights

Who owns the data? What happens with derived data and IP ownership?

Understand contentious issue on Audits

Audits - are they used to increase prices or find real abuse of content?

Development of non-display application use

Will vendors and sources of data look to charge for every application use (not just the display of content)?

Key issues around outsourcing/off shoring

Time zone issues, cultural and language issues

Credit crisis/crunch

A credit crunch (also known as a credit squeeze or credit crisis) is a sudden reduction in the general availability of loans (or credit) or a sudden tightening of the conditions required to obtain a loan from banks.

The Libor scandal was a series of fraudulent actions connected to the Libor (London Interbank Offered Rate) and also the resulting investigation and reaction. The Libor is an average interest rate calculated through submissions of interest rates by major banks across the world. The scandal arose when it was discovered that banks were falsely inflating or deflating their rates so as to profit from trades, or to give the impression that they were more creditworthy than they were

Hedge funds role in Market

a limited partnership of investors that uses high risk methods, such as investing with borrowed money, in hopes of realizing large capital gains.

Socially responsible investing (SRI), or social investment, also known as sustainable, socially conscious, "green" or ethical investing, is any investment strategy which seeks to consider both financial return and social good to bring about asocial change

Flash Crash also known as the Crash of 2:45, the 2010 Flash Crash or simply the Flash Crash, was a United States trillion-dollar stock market crash, which started at 2:32 p.m. EDT and lasted for approximately 36 minutes.

Political implication of High Frequency Trading

HFT "exacerbates the adverse impacts of trading-related mistakes", while also leading to "extremely higher market volatility and surprises about suddenly-diminished liquidity", which in turn "raises concerns about the stability and health of the financial markets for regulators. - predatory

Quantitative easing

Quantitative easing (QE) is a monetary policy in which a central bank creates new electronic money in order to buy government bonds or other financial assets to stimulate the economy (i.e., to increase private-sector spending and return inflation to its target).

China - stock connect

s a cross-boundary investment channel that connects the ... on the other market using their local brokers and clearing houses

Economic Sanctions - OFAC

The Office of Foreign Assets Control ("OFAC") of the US Department of the Treasury administers and enforces economic and trade sanctions based on US foreign policy and national security goals against targeted foreign countries and regimes, terrorists, international narcotics traffickers, those engaged in activities

Name Several News Organizations

Dow Jones, Associated Press, Xinhua News

The Depository Trust & Clearing Corporation (DTCC) is an American post-trade financial services company providing clearing and settlement services to the financial markets.

Who is Agencies Estado

Agencies Estado is a Private News Agency in Brazil

Who is Axon Financial Systems

Axon Financial Systems is a privately owned and self-funded company combining over 80 years of experience in the financial technologies and market data

Who is Barchart

Barchart.com Inc. is a provider of intraday stock and commodities real-time or delayed charts with powerful indicators and technical analysis

Name Several Large Data Aggregators

Thomson Reuters, Bloomberg, IDC/ICE, Factset, Morningstar

Name Several Index Providers

MSCI, S&P Dow Jones Indices, FTSE Russell

Fidessa group plc is a British-headquartered company which provides software and services, such as trading and investment management systems, analytics and market data, to buy side and sell side clients in the financial services sector.

MDSL leads the market in international Technology Expense Management and Market Data Management solutions

S&P Global Platts is a provider of energy and commodities information and a source of benchmark price assessments in the physical energy markets

RIMES Technologies is a financial data management specialist providing services to the investment management community.

Who is SIX Financial

SIX Financial Information aggregates data, directly and in real-time, from over 1500 worldwide sources, covering all the major trading venues

German Stock Exchange

Deutsche Borse Group (Eurex)

Australian Stock Exchange

BATS Global Markets

Purchased by CBOE

Mexican Stock Exchange

Bolasa y Mercados Espanoles

Spanish company that deals with the organizational aspects of the Spanish stock exchanges and financial markets

Malayisan Stock Exchange

Singapore Exchange Group

Euronext, the first pan-European exchange, spanning Belgium, France, the Netherlands, Portugal and the UK.

Japanese Exchange

London Stock Exchange - own FTSE Russell, MTS, FTSE TMX (Canadian Bond indices)

Name Several Brokers Dealers

Tullett Prebon, Tradition, ICAP

BGC Partners is an American global financial services company based in New York City. Originally formed as part of the larger Cantor Fitzgerald organization, ...

Currenex is a market-leading technology provider offering the FX community high-performance technology and deep pools of liquidity for anonymous and disclosed trade execution

Tradeweb builds and operates many of the world's leading electronic fixed income and derivatives markets, creating more efficient ways to trade.

MarketAxess is the leading fixed income electronic trading platform for institutional investors and dealers

Tullett prebon Information

Tullett Prebon Information - an inter broker dealer (IBD) provides pricing Across The Financial and OTC markets as well as Energy Markets & Their Derivatives

Tradition is the interdealer broking arm of Compagnie Financière Tradition and one of the world's largest interdealer brokers in over-the-counter financial markets

GFI provides competitive wholesale market brokerage services in a multitude of global over-the-counter (OTC) and exchange listed cash and derivatives markets

Activ Financial

ACTIV Financial is a leading financial market data vendor delivering complete market data systems, full market data management and global coverage

Proven, High-Performance, Market Data Solutions arrow icon. Arcontech is the leading provider of real-time market data management solutions.

BT has been designing, producing and installing trader voice products for over 35 years. Voice communication remains a critical element of the trade workflow,

Cisco is the worldwide leader in IT and networking.

Equinix is the world's largest IBX data center & colocation provider, offering the fastest application performance, lowest latency routes worldwide

Hardware-accelerated Exegy technology is at the heart of every Exegy Market Data System, designed for broad distribution to thousands of applications

Other Technology & System Providers

Solace Systems, TIBCO, Vela Trading, Solaflare, Oracle

EDM System Providers

AIM, Asset Control, Bloomberg PolarLake, Eagle Systems, GoldenSource, IGATE (Cap Gemini), Markit EDM, SmartStream

Name Several Brokers Dealers

Tullett Prebon, Tradition, ICAP

BGC Partners is an American global financial services company based in New York City. Originally formed as part of the larger Cantor Fitzgerald organization, ...

Currenex is a market-leading technology provider offering the FX community high-performance technology and deep pools of liquidity for anonymous and disclosed trade execution

Tradeweb builds and operates many of the world's leading electronic fixed income and derivatives markets, creating more efficient ways to trade.

MarketAxess is the leading fixed income electronic trading platform for institutional investors and dealers

Tullett prebon Information

Tullett Prebon Information - an inter broker dealer (IBD) provides pricing Across The Financial and OTC markets as well as Energy Markets & Their Derivatives

Tradition is the interdealer broking arm of Compagnie Financière Tradition and one of the world's largest interdealer brokers in over-the-counter financial markets

GFI provides competitive wholesale market brokerage services in a multitude of global over-the-counter (OTC) and exchange listed cash and derivatives markets

Activ Financial

ACTIV Financial is a leading financial market data vendor delivering complete market data systems, full market data management and global coverage

Proven, High-Performance, Market Data Solutions arrow icon. Arcontech is the leading provider of real-time market data management solutions.

BT has been designing, producing and installing trader voice products for over 35 years. Voice communication remains a critical element of the trade workflow,

Cisco is the worldwide leader in IT and networking.

Equinix is the world's largest IBX data center & colocation provider, offering the fastest application performance, lowest latency routes worldwide

Hardware-accelerated Exegy technology is at the heart of every Exegy Market Data System, designed for broad distribution to thousands of applications

Other Technology & System Providers

Solace Systems, TIBCO, Vela Trading, Solaflare, Oracle

EDM System Providers

AIM, Asset Control, Bloomberg PolarLake, Eagle Systems, GoldenSource, IGATE (Cap Gemini), Markit EDM, SmartStream

THIS SET IS OFTEN IN FOLDERS WITH...

FIA Certificate (Industry Issues) 2017

77 terms

FIA Certificate (The Technology) 2017

87 terms

FIA Certificate (The Data) 2017

151 terms

FIA Certificate (The Market) 2017

88 terms

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