They are simple folk, software developers, never comprehending the complexities of the real world, only understanding the simplicity of 1s and 0s in their binary environments. Communicating in a weird language replete with abbreviations and obscure acronyms.
I had a frustrating conversation with one such individual last week about the possible IT ramifications on a piece of software following the on-going debate about the continued use of CSAs and dealing commissions paying for research.
Me: Have you looked at the likely changes we may have to make to the system?
Him : Yea, sort of . . . just a couple of tweaks here and there.
Me: What? How can it be minor tweaks when we don’t yet understand what the final outcome will be?
Him : Yeah, minor tweaks, nothing much needs changing whatever happens.
Me : How can that be? At one extreme there’s the possibility that buy-side firms have to pay for research from their own pockets. At the other end, CSAs could be retained as present – and in between there are all the other variations, top-ups to the management fees, caps on CSAs, etc. How can the likely changes be minor?
There was a pause, as he sucked on his pencil, before he replied.
Him : So, all those alternatives, do they all involve putting money in pots – and then using this to pay out for research? Invoicing, reconciling balances, etc?
Me : Of course.
Him : And will all options require tools for deciding who to pay, how much and justifying why?
Me : Erm, yes.
Him : Well then!
Me : Well, what then?
His eyes rolled in their sockets.
Him : So basically, whatever happens, the only difference is the source of the money.
Me : Ah!
And, as I turned my back to walk away, he made one last comment.
Him : I guess we could put a ‘flag’ on the cash pot table to indicate the source of the money . . CSA, Fee or own money . . . if you really want to tweak the system?
And there we have it, the complexities and uncertainties of the financial markets pared down to its basic concepts by my software developer. Yes there is uncertainty about what Brussels, the FCA and ESMA may finally define, but basically, whatever the outcome, the processes everyone will need to adopt will basically be the same. And what’s more, it’s what they’ve all been doing for years . . . haven’t they?
- 30 Jul, 2015
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