Traders were some of the first finance workers to return to the office last year. In the past, bank executives have stressed that the compliance risks from remote work as well as the inability to replicate the energy and teamwork of a trading floor virtually are reasons why traders were brought back to the office relatively quickly following the outbreak of the pandemic.
The likes of JPMorgan Chase, Morgan Stanley, Citigroup and Citadel Securities, a leading market maker, have given staff more flexibility to work from home in recent days so long as they are not viewed as “essential”, according to people familiar with the matter.
In a memo to staff on Tuesday which was seen by the Financial Times, Citadel told employees that the company would resume its typical in-office work on January 3. During that week Citadel will require staff to take a rapid Covid test before coming to the office and to take a PCR test three times. The Royal Bank of Canada informed staff on Thursday that requirements to work from the office would be relaxed for most staff until January 17, according to a memo viewed by the FT.
Other Wall Street firms are standing their ground in regards to work from home policies, which have already become more flexible over the past year. Bank of America have not yet sent any memos encouraging staff to work from home and bankers at those firms say they do not expect one to come.
Bank of America is making other accommodations to make employees feel more comfortable coming in, like offering on-site booster clinics in each of its main markets starting next month.
However, trading floors overall are starting to become less crowded, according to traders and clients who phone them on a regular basis. This is partly owing to Covid cases in teams but also because of an effort by many to avoid infection so close to the festivities.
Bank offices are expected to become even more desolate next week with many people away for the season. Most banks have encouraged staff to take time off following a relentless year for markets.
When Covid first struck in March 2020, it was viewed at the time as the biggest test of the physical infrastructure for trading since the terrorist attacks of September 11 2001.
This time around, banks are more sanguine because of the relatively smooth experience of last year. Some traders, though, are concerned that widespread working from home would exacerbate how trading conditions always deteriorate in the second half of December, when festivities and the reluctance of many investors to take on risk before the end of the year can produce sharper-than-normal movements.
Year-end “illiquidity” was already “exacerbating the mess” in stock markets lately, according to Charlie McElligott, a Nomura strategist. Ian Lyngen, an analyst at BMO Capital Markets, also warned clients on Friday that deteriorating liquidity conditions were affecting the bond market.
Wall Street was also given a reminder about the pitfalls of remote work on Friday when US regulators announced a record $200m fine for JPMorgan after the US bank failed to keep records of staff communications on personal devices.
Compliance controls and document preservation among employees has become more challenging during the pandemic with staff working remotely. The Securities and Exchange Commission is one of the agencies which is also investigating additional record-keeping issues at other financial firms.
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