Uncharted waters: Investors get access to foreign exchange-traded funds

In 2022, Russian investors will get access to the wide possibilities of the global financial market. The Bank of Russia opens the market for foreign exchange-traded funds (ETFs) — one of the main savings instruments for households. The economy of ETFs differs from other investment funds, whose shares do not have secondary market. The opening of the ETFs market is intended to solve a number of issues for retail investors: moving away from the preference to individual foreign shares towards portfolio diversification, cost reduction, ensuring sustainable profitability, abandoning the aggressive securities trading, and supporting market competition. Soon, ETFs will be one of the driving forces in financial markets. However, their rapid growth is fraught with little-studied effects.

Machine learning and social theory: Collective machine behaviour in algorithmic trading

This article examines what the rise in machine learning (ML) systems might mean for social theory. Focusing on financial markets, in which algorithmic securities trading founded on ML-based decision-making is gaining traction, I discuss the extent to which established sociological notions remain relevant or demand a reconsideration when applied to an ML context. I argue that ML systems have some capacity for agency and for engaging in forms of collective machine behaviour, in which ML systems interact with other machines. However, ML-based collective machine behaviour is irreducible to human decision-making and thereby challenges established sociological notions of financial markets (including that of embeddedness). I argue that such behaviour can nonetheless be analysed through an adaptation of sociological theories of interaction and collective behaviour.

Applicability of Warren Buffett's investment criteria in equity securities trading on the Quito Stock Exchange, Ecuador / Aplicabilidade dos critérios de investimento de Warren Buffett em ações negociadas na Bolsa de Valores de Quito, Equador

The Quito Stock Exchange (QSE) through its objective of offering security to investors, has reflected an act based on good corporate governance practices, however, 2% of amounts correspond to shares that are traded nationally, being Ecuador one of the Latin American countries with the lowest amounts traded compared to 8% of GDP. The objective of the investigation is framed in determining if the investment criteria of Warren Buffett have applicability in the negotiations of actions in the QSE, added to this the presumed existence of aversion to risk on the part of the investor, but also the ignorance of the movement of market and securities transactions, with a population that possibly lacks financial education and does not have benchmarks to invest in a seemingly unknown market. The fields of inquiry that have been defined have to do with the buffettology that involves the investment techniques and criteria that have made Buffett the most famous investor worldwide and, on the other hand, the equity certificates of or documents that represent a Part of ownership of the assets of a company that in the future allows you to enjoy the derived benefits. In conclusion, the criteria are partially applicable in an average 72.23% within companies that could be very close to being excellent, with economic, legal and operational barriers that hold back the development of the stock market in the city of Quito.

Optimal layout of stacked graph for visualizing multidimensional financial time series data

In the era of big data, the analysis of multi-dimensional time series data is one of the important topics in many fields such as finance, science, logistics, and engineering. Using stacked graphs for visual analysis helps to visually reveal the changing characteristics of each dimension over time. In order to present visually appealing and easy-to-read stacked graphs, this paper constructs the minimum cumulative variance rule to determine the stacking order of each dimension, as well as adopts the width priority principle and the color complementary principle to determine the label placement positioning and text coloring. In addition, a color matching method is recommended by user study. The proposed optimal visual layout algorithm is applied to the visual analysis of actual multidimensional financial time series data, and as a result, vividly reveals the characteristics of the flow of securities trading funds between sectors.

Digitalization of the Process Landscape for Proprietary Bond Trading

On the surface, the process landscape for fixed income securities trading within most banks has changed only slightly in the past four decades. The value chain remains divided amongst front-, middle-, and back office, with IT in support. Front office negotiates deals with customers and other banks, middle office manages risks and reporting, and back office ensures that payments are made in exchange for a transfer of the bonds that have been traded. Though these processes have gradually migrated to electronic mediums, much of the work in all functional areas remains manual. But the advent of digital technologies, primarily process automation software and data integration in an open software architecture, allows banks to dramatically change how the processes along the value chain are carried out. Repetitive and predictable tasks can be performed by automated software, allowing humans to concentrate on complex activities that require flexibility and discretion. Those tasks that remain in the hands of humans can also be made more efficient by extracting data from software applications along the entire process chain and providing them to the human user at the right point in time in the right system.

THE INCEPTION OF SECURITIES TRADING AND THE LEGAL STATUS OF IT`S PARTICIPANTS

The article explores the legal peculiarities of stock trading in issue and non-issue securities, starting from the emergence of stock exchange relations in medieval Europe, when such a priori activity was international. As of today, diachronic analysis of the legal nature of securities – objects of private international law, theoretically important at once for the three sciences – law, history and economics, and practically in demand for banking and stock exchange law, law-making activity of national and international levels. The main object of the study in this context is the analysis of the subject composition, that is, the list of rights and obligations of the parties to the legal relationship over the circulation of securities encumbered by a foreign element – an object that has become increasingly relevant lately. Foreign trade law is largely customary, and foreign exchange law is a priori, since it arose under international law when it was never called before, and only then reciprocated by national legal systems. Unlike trade legal relations, which emerged as domestic and gradually evolved and expanded, exchange relations emerged to regulate relations with a foreign element, and only then began to be realized within the legal relations of domestic ones. Therefore, it would be appropriate to consider the “genetically” securities institute an institution of private international law. The presented scientific material deals with the genesis and evolution of the source base of legal regulation of the securities market and the establishment of close interdisciplinary links between the history of state and law and international private law.

Choice of Law in the Shifting Sands of Securities Trading

In this essay, the author examines how the conflict of laws has approached the task of determining the law applicable to issues relating to securities, and whether that approach is suitable for determining the law applicable to the proprietary aspects of securities created or traded through the use of distributed ledger technology (DLT), including cryptosecurities, and other new forms of securities holding and trading.

Clearinghouses Versus Central Counterparties From Margin Calculation Point Of View

Clearinghouses and central counterparties (CCPs) have a notable role in financial markets, namely facilitating securities trading and derivative transactions on exchanges and over-the-counter markets. They have to clear the transactions and carry out their settlements to decrease costs and settlement risk. To efficiently carry out this activity, they need to collect adequate collateral from the trading parties as guarantees. Two main elements of these guarantees are the margin requirement and default fund contribution. Our paper focuses on the margin calculations and emphasizes their notable difference in the case of clearinghouses and CCPs. Our main result is that clearinghouses’ margin requirement is better from a procyclicality point of view; however, CCP margining is more prudent based on our results.