European Women in Finance: Vicky Sanders

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May 21, 2020

SANDERS GROWS INVESTMENT ANALYTICS AT LIQUIDNET.

Shanny Basar talks to Vicky Sanders, global head of Liquidnet Investment Analytics about starting her own company, future plans and the importance of staying focused.

Vicky Sanders crossed the Atlantic in 2005 with two suitcases to join the summer internship scheme at Merrill Lynch in London. She is now global head of investment analytics at Liquidnet, the institutional dark pool, after working for a decade as a trader in equity sales and then co-founding a fintech focussed on making the research process more efficient.

Sanders joined Liquidnet last year when the firm acquired RSRCHXchange, a cloud-based fintech using new technologies to aggregate and build a marketplace for accessing institutional research.

In January this year Sanders was named global head of Liquidnet Investment Analytics, a new business to help portfolio managers and analysts get more intelligence into their workflows though the use of natural language processing, artificial intelligence and advanced search to find the right content more quickly.

Brian Conroy, president at Liquidnet, said in a statement: “Since joining us last year, Vicky has been instrumental in helping us bring to life our vision for Liquidnet IA.”

Sanders said Liquidnet IA launched a pilot for an app in the fourth quarter of last year to combine research with other content such as market data, alternative data and corporate communications and to push the most relevant personalised content to portfolio managers.

“It will be launched later this year once we have made further refinements based on members feedback,” she added.

The launch of the Liquidnet IA app is still on track despite the current lockdown caused by the Covid-19 pandemic which has led to staff having to work remotely.

“We have learnt a huge amount about flexibility while working from home and maintaining the same level of engagement intensity for the pilot program,” she said.

Sanders continued that Liquidnet has more than1,000 members who can take part in the pilot and a data science team in Europe and the US who are looking at a growing list of data sets and identifying actionable insights.

Investment Analytics also uses the in-house data available from the integration of OTAS, Prattle and RSRCHXchange. Liquidnet acquired OTAS Technologies, an artificial intelligence powered buy-side decision support and analytics provider, in 2017 and sentiment analysis provider Prattle last year, in addition to RSRCHXchange.

Launching a fintech

Sanders co-founded RSRCHXchange in 2014 with Jeremy Davies.

“Having spent 10 years on trading floors, I found the research process highly inefficient which led me to setting up RSRCHXchange,” she said. “My frustration hit a peak in the run up to MiFID II which also provided a catalyst.”

MiFID II, the European Union regulation, unbundled research payments and most asset managers then chose to pay for research out of their own revenues. Before MiFID II research costs were often ‘bundled’ into transaction commissions and paid by investors, with many buy-side firms not monitoring how much client money was being used or the quality of the research.

Sanders said: “Once I had convinced my partner that the risk of launching a new company could work for our family, I felt a lot of enthusiasm and excitement in challenging myself with a new role and responsibilities.”

Euclid Opportunities, NEX Group’s financial technology investment business, made a strategic investment in RSRCHXchange in 2017.

“RSRCHXchange was fortunate to receive investment from NEX Group’s Opportunities fund,” she added. “We also became their first investment in a fintech with a female founder.”

A report from Crunchbase last year found that only 3% of venture capital went to companies led by a female founder. Sanders said there are a lot of factors behind female founders receiving less venture capital attention.

“Funding in the UK relies on having a network which female, and male founders alike need to build throughout their career, they need to be able to ask for money and articulate a conviction for why they are a good investment,” she added.

She is also aware of the need to increase the number of young women and girls pursuing studies and careers in science, technology, engineering and mathematics (STEM).

“For example, my mother attended a girls’ school but had to go to a boys’ school in order to study maths and physics,” Sanders added. “As a mother of a son and a daughter I am aware of the need to provide STEM learning experiences at the same time that match their individual profiles.”

Sanders continued that financial services needs to provide opportunities where skill is available and the remote working environment may help the industry to meet that challenge.

Career advice

Prior to founding RSRCHXchange, Sanders was head of analytics sales at Marex Spectron, and held roles at both Goldman Sachs and Merrill Lynch. She has a degree from Harvard University.

“I attended a women in finance recruitment event and after hearing a talk from a credit trader I knew I wanted to trade,” she said. “I secured a spot in the summer internship scheme at Merrill Lynch in London and moved over with just two suitcases.”

In 2005 she was one of the few women on the trading floor but Sanders said that as she had played sport competitively prior to joining financial services, she was comfortable in a team environment.

“While it was hard not to notice the lack of women it did not concern me on a day to day basis,” she added.

Sanders continued that in order to be successful in client facing roles she had to deliver a good service and find a creative way to solve problems.

“It is also important to have a group of relationships with people that you look up to and can consult with, as well as being goal driven,” she added. “One of my mentors told me to establish a five-year plan outlining what success would look like and what I wanted to accomplish, an approach which I still use.”

She also advised that staying focussed and pursuing your passion is key to thriving in a competitive environment. “As a woman you should own that you bring a different skill set,” said Sanders.

©BestExecution 2020

IF YOU’D LIKE TO NOMINATE VICKY (OR ANYONE ELSE!) FOR ONE OF THE EUROPEAN WOMEN IN FINANCE AWARDS PLEASE CLICK HERE

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MeTheMoneyShow – Episode Six

By

Ian Rycott

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May 21, 2020

Dan Barnes, editorial director of Markets Media Europe and editor of The DESK, speaks to Lynn Strongin Dodds, editor of Best Execution about three key issues arising in the markets this week; how Asset Managers need to profoundly change their operating models; was it right for European regulators to lift the short selling ban, and the need to invest in high quality market surveillance tech with so many people having to work from home.

©BestExecution 2020

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DTCC launches studies for digitalisation in private and public markets

By

Lynn Strongin Dodds

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May 20, 2020

Depository Trust & Clearing Corporation (DTCC), the market infrastructure provider, is launching two studies designed at integrating digital ledger technology (DLT) in public and private markets.

The two projects, Ion and Whitney, leverage blockchain technology to improve the current business models. The former is a proof of concept (POC) that aims to validate an alternative, faster digital settlement service that maintains central netting and prevents fragmentation of the clearing and settlement ecosystem.

Stock market volatility in March resulted in a spike of margin calls as well as significant risk as a result of the current two-day (T+2) settlement requirement. The DTCC noted that its systems currently support one day and same day settlement, but “legacy operational industry processes and other factors have prevented the industry from moving beyond T+2.”

In 2017 when the market moved from T+3 to T+2, it was estimated that the industry saved around $1.36 bn in margin requirements. Other benefits could include optimising capital, reducing risk, improving workflows, and automation efficiencies.

On the private side, Project Whitney is DTCC’s prototype for a digitised private market infrastructure for each stage of private securities, from issuance to transfer. The theory is that security tokens among other solutions could eliminate much of the manual processes, leading to a smoother, more efficient market for private securities.

“The private markets are ripe for increased levels of automation and lack much of the infrastructure that has supported the public markets for decades,” said Jennifer Peve, Managing Director, Business Innovation at DTCC. “Project Whitney presents an exciting opportunity to leverage emerging technologies and develop completely new solutions from the ground up. We look forward to continuing our exploration of this area with the industry and in leveraging our vast infrastructure expertise.”

According to DTCC, both Project Ion and Project Whitney remain in the experimentation stage, and a decision to progress the projects will be determined following further analysis and feedback from the industry.

“Projects Ion and Whitney represent the next steps in our digitalisation journey,” Peve said. “Both serve as examples of practical experiments incorporating innovative technology and business concepts designed to strengthen post-trade processes and provide a resilient, secure and efficient post-trade infrastructure for the industry.”

©BestExecution 2020

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Women in Finance Q&A: Jodi DeVito, Credit Suisse

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Markets Media

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May 19, 2020

Jodi DeVito is Managing Director and Prime Services Head of Capital Services, Consulting and Client Services at Credit Suisse.

How have things changed in terms of diversity and inclusion since you started working?

When I started working in financial services, I don’t recall hearing much about diversity and inclusion. I remember being part of a large team of mostly men and thinking that it looked different from the population in business school, but I really didn’t think anything else of it. At that time, there wasn’t a culture of diversity, but now – as I’ve seen at my current firm – there are a number of initiatives focused on attracting and retaining women, and more women are being hired into our analyst and associate programs. Industry-wide, I have seen definite progress around the education of diversity and inclusion and stronger female numbers, but there is still room for female growth at the top levels of organizations and in P/L roles.

Who were your role models and the most influential people in your career on both the personal as well as professional and education front?

I was lucky to have many role models and I sought them out. First of all, my parents: I thought for the longest time that my father was my role model as he continually pushed me to get good grades and get the best job possible, no matter what. I realized later in life that it was really my mom who was my biggest role model. She didn’t strive for perfection like my dad; instead, she believed in balance. “Do your best; you will make mistakes. More importantly, be happy.” Professionally, I have several mentors. Some of them don’t even know that they are my mentors and they may not even know I exist. They have mentored me by their presence, by their words, by what they stand by. Many of my mentors are men in the industry that believed in me and took action to help me in my career, and still do.

Who do you mentor?

I am active in hiring and building Credit Suisse’s talent pipeline through our annual Analyst Program, not only seeking out the best and brightest talent within the industry, but also providing guidance and instruction throughout the program. I have been a mentor for junior staffers in Credit Suisse’s accelerated leadership program that is designed to create the best future leaders of the firm. As a senior woman in the industry, I continue to mentor women as part of an ongoing professional development program at Credit Suisse. And most importantly, I hope that both of my children look up to me as a mentor as they have both decided to go into business. My daughter is about to embark on a career in the same industry, and she is striving to break down diversity barriers further in her chosen area of trading.

What challenges still exist for women?

There are still challenges that exist in managing family and work. There has been gradual improvement, but it is an ongoing issue. As mentioned previously, I also want to see companies showing more diversity in senior seats – among different roles, not just those that are operational in nature. Also, salary inequalities still exist across most industries.

Why in some cases, has progress been slow?

I think the intent is there for the industry, and many companies are working to assimilate diversity and inclusion into their culture, which takes time. In order to progress faster, I would say there needs to be less talk about change and more action. As one example, Credit Suisse launched the accelerated leadership program I mentioned to focus on developing the leadership skills of women AVPs (associated vice presidents) with an objective to build a strong senior leadership pipeline.

Looking ahead, what do you hope to see?

In the future, I hope to see more diversity at all levels and, in every industry, equal pay! Everybody deserves an opportunity to operate at their greatest potential, and the movement towards more diversity and inclusion is making that possible.

Is Remote Work the ‘New Normal’?

By

Siobhan Brownlow

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May 19, 2020

Remote working is likely to become a permanent feature of the ‘new normal’ after the Covid-19 pandemic and firms will invest in greater automation and becoming more data driven.

Consultancy Capco said in report, COVID-19, Risk Management Challenges, Short-Term Volatility and Illiquidity – What Next for Capital Markets?, that firms have weathered the initial COVID-19 storm.

“With the vast majority of the industry initiating remote working or split rotas for front office staff, the ‘plumbing’ of the financial system continues to operate unimpeded – and indeed, has managed major volume spikes without high profile disruptions or outages,” added Capco. “It also seems few challenges have arisen from a cybersecurity or risk perspective, although time will obviously tell.”

However remote working has also highlighted operating model inefficiencies and where manual processes are required to support certain products.

As a result Capco expects firms to accelerate their digital transformations using technologies such as cloud, machine learning and distributed ledger in the ‘new normal’ that will follow the passing of the pandemic.

“This will include projects to enhance digital channels and deepen end-to-end automation, as well as leverage data-driven concepts,” added Capco. “Cost reduction-related transformation will be a key theme. Remote working will be further ingrained within operating models.”

As remote working becomes a permanent feature across all enterprises, the consultancy said roles within the workforce will need to be re-evaluated and real estate footprints may need to reduce.

“We will see an acceleration in the use of cloud technology to allow faster responses to changing circumstances via enhanced agility and scalability,” added the report. “This will reduce firms’ dependency regarding ‘on-premises’ infrastructure (and its management), allowing them to pivot their focus and resources to modern architectures and digital engineering.”

There may also be less offshoring and some operations will be bought back to home territories to bolster contingencies.

Murray Longton, principal consultant at Capco, said in a statement: “Consolidation, enhanced digitisation and enhancements to risk management will all be key features of the transformation ahead. This is the moment to reassess and reimagine operating models through new technology and new ways of working, tapping into the cost and risk benefits offered by automation, digital enablement, data insights and next-level operational resilience.”

Surveillance technology

Remote working has also presented a challenge for trade surveillance systems, especially as the pandemic caused increases in volatility.

Greenwich Associates said in a report, Protecting Market Integrity During High-Risk Conditions, that volatility in March this year created abnormal trading patterns that, in many cases, were marked as red flags by surveillance and compliance systems Trade surveillance alert volumes surged more than 600% from January levels for many global market participants, according to data collected by Nasdaq said the consultancy.

Danielle Tierney, senior analyst for Greenwich Associates market structure and technology, said in a statement: “The good news is that investments in trade surveillance and compliance systems over the past decade helped trading desks navigate both the historic spike of market volatility in March 2020 in the face of additional unprecedented challenges, such as shifting the vast majority of staff to working at home.”

Tierney continued that early conclusions are cautiously optimistic about the performance of both market surveillance systems and the overall stability of the financial market infrastructure during the crisis.

However, she also warned that some regulatory and reputational risks may take time to appear.

“In particular, concern over reputational risk is likely to be an even more prominent factor, should inquiries and speculation into potential market abuse occur as the pandemic subsides,” added Tierney.

Euronext Says Covid-19 Changes M&A Market

By

Siobhan Brownlow

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May 19, 2020

Stéphane Boujnah, chief executive of Euronext, said some sellers are becoming more flexible and the mechanism of acquisitions is changing due to the volatility caused by the Covid-19 pandemic.

Boujnah spoke this morning on Euronext’s results call for the first quarter of this year.

He continued that the pan-European exchange operator is continuing to look at acquisitions to meet its ambitions for growth and to diversify revenues away from trading.

Last month Euronext announced the acquisition of of VP Securities, the Danish central securities depository.

Euronext will acquire c.70% of VP Securities, the Danish #CSD operator with more than €1.2tn of assets under custody.
A new milestone in the deployment of Euronext’s ambition to build the leading pan-European market infrastructure.
➡️https://t.co/4wWQEsZmcc pic.twitter.com/p5gV14Uo6a
— Euronext (@euronext) April 23, 2020

“We are monitoring other situations and are having some dialogues but in most of these, nothing happens,” Boujnah said.

He continued that the fall in prices during the pandemic means some sellers are becoming more flexible, although there are not yet any distressed sales and there are likely to be fewer open auctions.

“The grammar and choreography of doing deals is changing,” Boujnah added. “This creates opportunities for us as we are agile and can take part in bilateral processes.”

He continued that disposals of market infrastructures owned by bank consortiums present a good opportunity.

“There were sales after the global previous crisis so we expect others,” said Boujnah. “This a spot where Euronext wants to be.”

VP Securities

In a market infrastructure deal, Euronext has announced it intention to acquire the Danish CSD. Boujnah described the deal as a new major milestone in Euronext building a pan-European market infrastructure following the acquisitions of Oslo Børs VPS and Nord Pool

“It will double our CSD business size, further improving our revenue mix and increasing the share of non-volume related revenue,” he added.

In 2018 trading made up 45% of group revenues and last year, on a pro forma basis, this would have reduced to 36%.

2019 Pro Forma Revenue. Source: Euronext

Boujnah continued that VP Securities lacked scale and shareholder support for growth projects.

“VP Securities shares technology with VPS in Oslo and the companies know each other well,” he added. “They have previously discussed joint offerings.”

He said there is an opportunity to monetise data from the two Nordic CSDs as there is a demand to have more information on the behaviour of the asset owners.

Results

Giorgio Modica, chief financial officer, said on the call that all asset classes experienced a double-digit increase in trading revenues in the first quarter and post-trade revenues doubled due to the consolidation of the Norwegian VPS CSD.

Euronext delivered a strong performance in the first quarter of 2020.

Read the full press release: https://t.co/TgHcJPMB75 pic.twitter.com/i6aHJATrjj
— Euronext (@euronext) May 14, 2020

Total trading revenue increased 73.3% to €111.8m with double digit growth across all asset classes and Nord Pool power trading contributing €7.2m. The exchange said like-for-like trading revenue increased 54.9% in a highly volatile environment.

Boujnah said: “The group reported a cash trading market share at 69.9% which highlights the important role of transparent market venues ensuring fair and orderly markets under extreme market conditions. This quarter’s solid performance demonstrates the resilience of our operating model and validates the investments over the past four years in developing our state of the art proprietary trading platform Optiq.”

Best Buy-Side Fixed Income Trading Desk: Eaton Vance

By

Markets Media

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May 19, 2020

Eaton Vance won Best Buy-Side Fixed Income Trading Desk in the 2020 Markets Choice Awards.

Markets Media caught up with Mike Nappi, Manager of Investment Grade Corporate Trading at Eaton Vance, to learn more.

How is Eaton Vance’s fixed income trading structured?

Eaton Vance operates several coordinated trading desks that provide dedicated trading to the portfolio management teams or asset classes they support. This allows traders to be intimately familiar with portfolios under their purview, suggest investment approaches based on market activity, and encourages sharing information across trading desks and asset classes.

Describe the ethos of Eaton Vance’s FI trading desk — what are the primary capabilities and how does it differentiate vs. peers?

Our goal for the investment grade trading team is to increase the level of knowledge of all traders on our team so that we can effectively support our portfolio managers, regardless of the investment strategy. Most traders have multiple roles including portfolio construction and implementation, and in some cases, portfolio management. Creating a collaborative, deeply skilled trading team has allowed us to be more efficient, deliver best execution on our trades, and address client needs.

What are recently completed and/or ongoing initiatives to trade better?

In late 2019 we modified our approach around the new issue process that gives our trading team greater flexibility. Due to its manual nature, the investment grade new issue market can be cumbersome and time consuming. Most of the information gathering for these new issues requires phone calls and chats between buy-side and sell-side. We’ve developed a rotating schedule that allows one trader to manage the full investment grade new issue process for a particular day. This allows the remainder of the trading team to address secondary trading opportunities. The daily rotation ensures we stay updated and active to bring fresh insights and trading ideas to both the primary and secondary markets. The deeper skill set of all our traders allows us to be flexible and adjust to meet client and portfolio demands, as necessary. With a record over $850+ billion of new investment grade issuance as of mid-May 2020, this has paid off.

How have Eaton Vance traders adapted to the market volatility we’ve seen in recent months? How is this a challenge and how is it an opportunity.

We have a seen tremendous opportunity in all-to-all trading, particularly with the volatility over the last few months. At times normal market participants stepped away, which created opportunities for us when selling and asking for liquidity, and also when buying.

How do automation and AI fit into Eaton Vance’s trading, and how will they fit in the future?

We are big proponents of automation and AI. The Eaton Vance investment grade team was one of the earliest adopters of investment grade auto-execution in the IG market. We continue to utilize new and different technologies for pre-trade and post-trade opportunities. These newer AI and automation tools also play a large role in portfolio construction, as well as post-trade execution analysis.

What do you see as the future of buy-side fixed income trading?

We believe the future of buy-side trading will be a mix of traditional, fundamental trading and technology-enabled automation. Some of the big decisions facing the industry include voice and interpersonal trading versus electronic trading, and venue selection. These decisions will be pivotal in determining execution quality that goes far beyond traditional bond and relative value analysis. Technology will play a bigger role for both and those able to balance new ideas with more traditional concepts will be the most successful.

2020 Markets Choice Awards Part 3

By

Markets Media

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May 19, 2020

The third and final segment of the 2020 Markets Choice Awards was webcast on Thursday, May 14.

Congratulations to the winners:

Jerome Pustilnik Visionary Award: Thomas Peterffy, Interactive Brokers
Excellence in Regtech, Product Solution: FRTB Service, DTCC
Best in Cloud: IEX
Best Clearing House, Equities: OCC
Best New Product: Portfolio Trading, Tradeweb
Best Multi-Asset EMS: smartTrade Technologies
Best OMS: Charles River Development
Excellence in Trading: Joe Scafidi, Brandes Investment Partners
Best Buy-Side EMS: FactSet
Best in Regtech, Surveillance and Financial Risk Management: Eventus Systems
Best Buy-Side Equities Trading Desk: State Street Global Advisors

Thank you to all participants, viewers, and sponsors of the 2020 Markets Choice Awards! We hope to see everyone live and in-person for the 2021 Markets Choice Awards.

To view Part 1 of the 2020 MCAs, click here. For Part 2, click here.

Asset managers need to find a new way to navigate uncharted territory

By

Lynn Strongin Dodds

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May 19, 2020

After a stellar year in 2019, fund managers will have to create ‘world-class’ client experiences and use data-driven intelligence to generate more meaningful insights if they want to survive in the post Covid-19 world, according to a new report by Boston Consulting Group – Global Asset Management 2020: Protect, Adapt, and Innovate.

“Overall, the market storm of early 2020 has only intensified the industry’s challenges, as asset managers find themselves in uncharted territory,” said Lubasha Heredia, a New York–based BCG partner and c-oauthor of the report. “After the crash of 2008, the asset management industry benefited from a market rebound that produced the longest bull market in history. In 2020, however, firms must recover flows and profitability through more fundamental changes to their business models. This is both a challenge and an opportunity to accelerate and shape what the future of asset management could look like.”

In practice, the report noted that successful firms will be those that refocus their product portfolio, transform cost structures and invest in innovative technologies that will drive the business forward over the long term. Information will continue to be key and firms can carve out an edge by building data science capabilities that gather, clean, synthesise, and visualise vast amounts of client information.

Moreover, the report advises fund managers to strengthen their distribution capabilities as well as pursue M&A opportunities and strategic alliances. It said, “A reshaped operating model may include technology that provides a standardised, fully digitised ecosystem to support insurance partners and their distribution networks to enhance client experience. Another key will be a tailored approach to embedding ESG factors in the asset manager’s investment processes.”

According to the report, last year, Europe, the second largest region by assets, saw its assets under management jump by 13% to $22.8tn. The UK, which is Europe’s biggest market, accounting for a 27% chunk or $6.1tn, experienced an expansion of 13% despite Brexit uncertainty. However, research from UBS showed that the gains were wiped out in March when European fund managers suffered outflows equal to 3.1% of AUM, as much as the previous nine months combined.

Six EU states scrap bans on short-selling

By

Lynn Strongin Dodds

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May 18, 2020

The European Securities and Markets Authority (ESMA) has scrapped bans on short-selling which were introduced during extreme volatility in March when national lockdowns were rolled out across the European Union to stem the Covid-19 pandemic.

The Austrian, Belgian, Greek, French, Italian and Spanish securities regulators have jointly decided to lift the restrictions. Italy, whose ban was set to expire on June 18, decided to align itself with the other five EU states. Other countries including Germany and the U.K. didn’t impose short selling sanctions on equities.

France’s stock-market regulator, the Autorité des Marchés Financiers, and Italy’s Commissione Nazionale per le Società e la Borsa said they had viewed “progressive normalisation” in markets.

“Markets have partly reduced their losses, trading volumes and volatility have returned to levels that are still high compared to mid-February, however this reflects market participants’ uncertainties in the current context,” according to the AMF in a statement.

Last week trade groups called on the AMF and finance ministry to end the ban. They included the Alternative Investment Management Association, which has 2,000 members in over 60 countries; the FIA European Principal Traders Association; the Managed Funds Association, whose members manage over a third of global hedge fund assets; and the World Federation of Exchanges, whose members include the major trading platforms around the world.

In a letter, they said, “Market data on securities subject to the restrictions in place in Austria, Belgium, France, Greece, Italy and Spain are available and show that those securities are not collectively performing better than those in comparable jurisdictions that are not subject to restrictions; shares are more volatile than they were prior to the bans; and markets exhibit wider spreads since restrictions were put in place.”

They added that, “Over the longer term, the bans risk undermining confidence in key European financial markets and hampering the goal of a Capital Markets Union, something that will be vital to European recovery from the profound economic shock caused by COVID-19.”

Volume traded in restricted shares made up 30% of the total volume traded in Europe. After the bans, this value dropped to 23%, according to the trade groups.

Analysts at Barclays said the move to lift the ban shouldn’t reintroduce volatility. They looked at the short-selling bans during the global financial crisis and found that European stocks rallied after their removal. “It seems that as long as fundamentals improve, short selling should not be an impediment to further recovery in equity markets,” they added.

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SANDERS GROWS INVESTMENT ANALYTICS AT LIQUIDNET.

Shanny Basar talks to Vicky Sanders, global head of Liquidnet Investment Analytics about starting her own company, future plans and the importance of staying focused.

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