Profile : David Miller : Invesco

April 30, 2015

MOVING GOAL POSTS.

David Miller, head of EMEA equity trading, Invesco explains how the buyside is changing the rules of the game.

How is the trading function structured at Invesco and what is your role within that?

Over the past few years we have centralised trading into three geographical regions, the US, EMEA and the Far East. Traditionally trading desks were more or less in the same place as the Fund Managers, regardless of where in the world the stock was traded. We now have traders operating in relevant time zones taking full advantage of local knowledge, and importantly, operating in real time.

The EMEA Equity team consists of seven traders divided between Henley-on-Thames and London, representing the various locations the European businesses of Invesco have always occupied. There are still a large number of Fund Managers based in Henley and they value face-to- face contact with the traders.

The tactical advice the traders are able to give is increasingly seen as an important part of the investment decision process.

There has been a lot written about the changing relationship between the buy and sellside. How do you feel it has altered? Is the buyside taking more control over the order flow?

Without doubt the buyside trader has become more empowered as the job has evolved. Those we see today are very different from those we might have seen ten years ago. Traders have far more tools available to them to enable them to interact with the market directly, and far greater attention is now paid to measuring the execution performance and value that we add. There is increasing regulatory and customer demand on us to demonstrate and quantify how the trading process is contributing to the overall investment proposition.

Notable is the proliferation of trader focus groups where ideas and market developments are aired, and in some cases put into practice. It is no surprise that some new trading venues are born of these groups as we become more involved in market structure and strive to find ever more suitable venues to transact business.

We have taken more control of the day-to-day flow, however the relationship with the sellside remains very important.

There had been an assumption that the Institutional trader would work all his trades via algos, leading to a significant retrenchment by the brokers. However, in reality the skills of the traditional stockbroker are still very much in demand, especially at the smaller end of the market. It takes a specialist to place or source stocks that have fallen out of favour with other investors. Not to mention capital provision, an important, if sometimes costly function and very useful aid to liquidity.

I read that you feel algos have become more commoditised. Why do you think that?

We could have well over a dozen different algo suites sitting on the desk that on the face of it are fairly similar. They all trawl through both dark pools and lit markets seeking out liquidity on our behalf, with perfectly crafted trading functions in the desire to minimise market impact. The trick is to identify a particular USP, or to bracket the strategies to more usable levels of aggression.

There has been a large amount of investment in the equity space but, the interesting thing will be how this technology moves to other asset classes.

What impact do you think MiFID II will have on the industry especially the caps on dark trading?

If larger trades are included in the dark pool trading caps, due to the large scale reference waivers, the ability of institutions like us to transact larger orders should not be restricted. I understand the desire to push a substantial amount of flow to lit markets. Creating transparent price formation is important, particularly for retail flow. However, there are some orders that are not suitable and are simply too big to work through an order book. They need to be broken up or be allowed to rest in a dark pool, in many cases to maintain an orderly market.

We may well see the resurgence of the specialist broker who can source liquidity away from the more traditional venues once again.

The important thing is to permit different execution methods, to enable the trader to get the best result for the client in as reasonable and fair way as possible

The buyside is far more engaged in MiFID II than it was in MiFID I. I’m not convinced that the industry on the whole was really fully ready in 2007. Now however we have much more internal engagement and are an integral part of the decision-making process.

Do you think that best execution has improved since MiFID I?

If you were to ask me what keeps me awake at night, it is how do we define, prove and demonstrate best execution. It is hard to define and is open to multiple interpretations. I do think the absolute prices achieved today are better than in the past but there is still work to be done on the pre-trade side. This is the art and skill of the trader, as opposed to the science and technology of a post trade analysis.

Traders have their own process of determining the best tactic to get the best result, the challenge is to somehow make that measurable and incorporate that into a framework to demonstrate what we have done to achieve the best and most suitable outcome.

I think it is one of my industry’s biggest challenges and we are spending a great deal of time with our compliance department and regulators to develop the right kind of framework.

MiFID I set us on the road while MiFID II will keep us very much engaged.

What do you think of the buyside platforms such as Plato and Luminex? Will they help in mitigating liquidity risks? Will it stop HFT from gaming?

New trading platforms need a large number of participants and institutional flow to make them work. Liquidity is always the defining factor in the success of a venue and with the right mix of participants and subsequent commitment I would fully expect them to prove their worth. Both have been created out of Industry need, and to a large extent, dissatisfaction with the way the market has evolved.

What do you see as the biggest challenges and opportunities for 2015?

Going back to my earlier point, I think it is going to be around the best execution piece and trying to come up with some practical definitions which allow us to turn an art into a scientific, proven process.

It won’t be easy because of the diverse and fragmented nature of the markets but the aim is to get the best available price for the client.

Biography:
David Miller is the head of European, Middle East and Africa equity trading for Invesco. He started his career in 1984 as a dealer on the London Stock Exchange, working with Smith New Court trading mainly smaller companies. In 1995 he was involved in the creation of the UK’s first Order Driven Exchange, Tradepoint, where he was market controller. Miller returned to trading with Knight Securities in London in 2000. Prior to joining Invesco in 2001 he spent some time with Virt-x as a trading consultant as they launched a pan-European exchange.

©Best Execution 2015

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Off-the-shelf : LINX Networks

Ian Rycott

April 30, 2015

Trader voice revolution

Gareth Malone and Duraid Haddad, Founders of LINX Networks spoke to Best Execution about a revolution that’s happening on trading desks across London.

You’re a young company in a crowded market; what are you offering and what led you to believe this was a good business opportunity?

Despite being a young company we have clocked up quite a lot of experience in the City and one of the frequent complaints we heard from a number of major banks and trading floors about their dealer boards was poor service and a lack of flexibility. Suppliers didn’t seem to distinguish between regular telephone-users and traders, and while trading requirements might change by the day – or even sometimes by the hour – raising a support ticket for a traditional dealer board might take days (and come with a hefty support charge). But time has moved on and so has the technology, and this was the gap in the market that we were aiming to plug.

The most exciting development for us though, is the growing interest from trading floors in soft turret solutions and cloud offerings. They are increasingly concerned about mobility, cost reduction and being greener. From a bank’s IT perspective they can see the possibility of virtualising their trading floors and taking ownership of a solution which the old traditional dealer boards just do not allow you to do. This, we think, will be a game changer.

You mention soft turrets; what are they and what advantage do they bring to the trading desk?

At its most simple, it’s a trading turret without the hardware. It’s an interface that can be used on any PC, laptop or tablet (not just PC) and handle up to 30 private wires simultaneously, just like a standard hardware based dealer board. Its key advantages are flexibility and cost. In particular we are finding that banks and trading floors are showing a big interest in soft turret solutions where traders need the full function of a dealer board but on a tablet or laptop. This also plays out well for disaster recovery scenarios and drives costs down considerably.

The advantages of soft turrets are huge and we are seeing more floors move away from the big hardware and their big support costs to a more cost-effective, adaptable and also greener solution. Even with trading floors that need to stay on hardware turrets for compliance reasons we are seeing the adoption of soft turret solutions for disaster recovery scenarios.

The double whammy of keener competition and regulatory reform are heaping pressure on the trading community. How can LINX Networks help?

LINX Networks are not the only player in this market, and therefore partnerships are key to giving us competitive advantage and delivering the same to our clients. We are the only UK Gold Partner of IP Trade, a company that has grown in under ten years to be the number one supplier of IP PBX Turrets. This is no mean feat when you consider the size and historical dominance of the two main competitors in the market (IPC and BT). In comparison we offer a significant saving in total cost of ownership because IP Trade have not tried to re-invent the wheel, but in fact leverage the end customer’s existing telephone system (PBX) to provide a lower cost back end solution. All of the IP Trade dealer boards are compliance compatible and fully meet FCA regulation requirements.

We also implement a training programme for any bank or hedge fund that we maintain, so the institution’s in-house IT team can have full ownership of their trading floor, allowing them to handle their own first and second line support as they wish.

With regard to soft turrets specifically we are currently working with the IP Trade T3 Flex soft turret system, but we’re very excited about the new T4 system due out later this year (see photo*).

Trading desks come in all shapes and sizes, buyside, sellside; retail, institutional; bulge-bracket, boutique hedge-fund; who are you aiming your services at and why?

All of the above! LINX Networks services are aimed and can be tailored to all types of trading desks – securities traders, brokerage houses, banks and hedge funds. This is because the IP Trade software can be tailored to each desk or to user-specific demands. Each user starts with a blank canvas and we then tailor each dealerboard to the clients’ individual requirements.

Where do you see the trading desk of the future heading, and what role can LINX Networks play?

We believe trading floors in general are moving towards a software solution rather than a combination of hardware and software. We also believe trading floors are looking more to the cloud, whether for hosting a whole floor or just from a disaster recovery perspective. We have already taken steps in this regard and invested heavily in our cloud solution. We can offer a turret and private wires in the cloud to any trading floor at a fraction of the cost of legacy alternatives.

The IP Trade soft turret is already proving that the market is moving this way. We have just recently installed an IP Trade soft turret solution for a major financial floor in London allowing them to move away from old traditional hardware turrets onto a soft-based turret solution. Their head traders can now work anywhere in the world and be able to trade at maximum capability with no disruption. All they need is a device – a laptop or even an iPad – and an internet connection. It allows traders not to miss a single trade, and is all fully secure under FCA – it’s a ground-breaking change in IT trading technology.

We also believe virtualisation is key. When we meet prospective clients who are using old dealer boards on their trading floor, for many the first thing they ask is whether they can remove their old racks from their datacentres and virtualise the whole floor? Thanks to the technology of our partners IP Trade we can.

IP Trade T4 Turret

IP Trade’s new T4 turret offers offers trading professionals a comprehensive, streamlined trading turret communications experience.

User features:

Integrates Cisco, Avaya, Alcatel-Lucent, Broadsoft and Asterisk internet telephony systems
Up to 10,000 shortcuts arranged in configurable pages
Availability gauge (Adaptive Presence)
Open line dealing (One-to-one & Multi-party)
Private wire Hoot & Holler or Hoot & Holler over IP
Intercom (individual, broadcast, groups)
Call supervision & interception
DDI sharing (with Cisco IP phones)
Voice recording search/replay at the turret
Video/audio streaming (incl. for wall mounted displays)

©BestExecution 2015[divider_to_top]

Trading venues : Evolution never stops

Ian Rycott

April 29, 2015

NEVER A DULL MOMENT.

Louise Rowland assesses the fate of the trading venue.

Be careful what you wish for. That’s how one seasoned market practitioner sums up the evolution of the equities trading venue landscape post MiFID I. Back in 2007, regulators were keen to encourage new players on board, to shake up the monopoly of the primary exchanges and deliver greater competition, fairness and transparency. Few can have anticipated the explosion of alternative trading venues that followed, together with, some argue, excessive fragmentation of liquidity.

A number of these newcomers have fallen by the wayside, ill-equipped to thrive in the harsh economic climate. There have also been periods of consolidation through M&A activity, such as ICE’s acquisition of NYSE Euronext in 2012. Yet new entrants continue to pitch up on the scene, a trend likely to intensify as the market gears up for MiFID II in January 2017, set on pushing trading across all asset classes into open and transparent markets.

Breaking the mould

Is the market already too crowded? One man’s fragmentation is another man’s healthy competition. Europe now has over 35 alternate liquidity sources to the primary exchanges in Europe, including broker crossing systems, lit and dark MTFs. The US, following RegNMS, has 13 public stock exchanges and an additional 50 alternative venues. That translates, inevitably, into smaller trade sizes, particularly in dark pools. “It’s crazy,” agrees one US market participant, “but where do you draw the line in the sand as to how many it should be? It’s a very hard thing to do.”

On the other hand, the proliferation of MTFs has supplied users with a welcome degree of choice, faster trading and lower costs. According to Fidessa’s Fragulator, dark MTFs accounted for 5.8% of European market value in 2014, excluding OTC trading.

Rob Boardman, CEO, EMEA at ITG, is a huge fan of MiFID I and all the market activity it has generated. “It meant the removal of centralised rules which enshrined the exchanges with privileges. Most industries are better off with a very competitive offering. Now we have genuinely different alternatives in terms of price structure, methods of interacting with customers and so on. It’s like a golfer with a different set of clubs to choose from. You take the right club out of your kit bag depending on what it is that you need.”

MTFs with USP

The key is differentiation û having a USP to add to the trading ecosystem, rather than just setting up your stall as another me-too MTF. Steve Grob, director of group strategy at Fidessa, sees more of this ahead. “I think we will see more venues trying to solve specific problems of trading styles. What we need is trading venues with multiple views, of different types and different risk appetites to achieve the best mix for clients. Everyone is looking at a mountain of work under MiFID II and thinking, ‘do we really need another generic trading venue unless it’s one that is trying to solve a particular liquidity problem or has a unique technical specialism’.”

Turquoise’s new Block Discovery Tool, for example, has been very successful in chasing down large sized trades for its members. Aquis Exchange arrived on the market last year with its radically different subscription pricing model. Platform-in-waiting the Plato Partnership is making waves ahead of its launch. Developed by a consortium of leading banks and asset managers, it is being designed as a not-for-profit equities trading venue, supporting academic research to improve Europe’s market structure.

It’s a welcome addition, says Rebecca Healey, senior analyst at TABB. “Plato is a development that the industry definitely needs. People have been looking for a solution to the requirement for a utility exchange for years, however utopian this may seem. We have a European marketplace that currently doesn’t work as it should and Plato is trying to find answers to complex questions. That should be commended. By committing to conducting research into the market structure debate, we can focus on prevention rather than cure. There’s an altruistic angle to it which is new; sharing intelligence collaboratively can improve the market for all.”

In the US, IEX launched in 2014, unveiling its pioneering ‘speed bump’ to prevent HFT firms from front-running other traders, and has its sights set on being a fully-fledged stock exchange by the end of 2015. Fellow newcomer Luminex is also focusing on minimising the impact of HFT and reducing stock trading costs.

Has best execution improved, thanks to the influx of all these new venues? Some believe the term itself is too nebulous or muddled, while others see the concept as overly prescriptive. That’s particularly true in the US, where the focus on price often outweighs all other considerations or matrices.

Lauri Rosendahl, senior vice president, Nordic equities and equity derivatives at Nasdaq, is upbeat about the situation in Europe, however. “In the current market, post MiFID I and pre-MiFID II, we have a well-functioning, competitive dynamic in cash equities trading and best execution is relatively easy to achieve. It doesn’t require a lot of investment on the part of brokers or investors. We as a venue are running a primary exchange offering for our members combined with both smart order routing and execution algo services as a one stop shop service for best execution. They have everything they need for it, in one neutral environment.”

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Trading venues : Evolution never stops Part II

Ian Rycott

April 29, 2015

WHERE EQUITIES LEAD.

Will the changes in equities trading venues be mirrored in other asset classes, as the regulatory push to trade on-exchange continues?

Quite likely, thinks Ronan Ryan, chief strategy officer at IEX in the US. “We’ve already seen that happen in fixed income. Equities is the litmus test, the first to electronify, for example, and then the others follow suit. The same may be true of fragmentation. It’s learnt behaviour. In the same way, people also see what worked in US equities and what didn’t. The US is the front runner, just like equities is for other asset classes.”

The model may not necessarily be the same though, insist others. Other asset classes often need a totally different approach. Fixed income, for example, shouldn’t be a clone of the equities market structure but allowed to develop and grow in its own form. One observer comments: “In fixed income, the number of different bonds is far greater than the number of stocks. Liquidity is inversely related, so you have a larger number of bonds traded far less frequently. That doesn’t fit the lit exchange model. The whole ethos of how the trading works is different.”

There is also a growing number of competing exchanges in the derivatives space, given the current drive towards futurisation and OTC clearing. In the FX arena, award-winning LMAX has developed as leading MTF for global FX trading with clients in over 80 countries.

Multi-asset class trading may well be the way forward. The market has seen several recent acquisitions by equities trading platforms of venues in other asset classes. BATS Chi-X recently acquired Hotspot FX and ITG bought RFQ-hub, a multi-asset platform for global listed and OTC derivatives. Liquidnet, the buyside to buyside block crossing network, acquired bond trading platform Vega-Chi in March 2014.

Per Lovén, head of international corporate strategy, Liquidnet, explains, “A solution was needed to unlock liquidity in the bond market and we are looking at providing one, utilising our buyside blocks trading model. We’ve been consulting with our members, scoping out the liquidity opportunities, and have made a lot of progress in the last 12 months. The end goal is a multi-asset front end trading application for our members. We’ve found we have a lot of momentum. People know the platform and the technology and we’re creating solutions based on our existing know-how and relationships.”

Keeping it creative

As MiFID II looms, some point to a degree of denial on both the buy and sellside as to the enormity of what lies ahead. Others counter that, until the final content of the new directive is published at the end of 2015, no scenarios are set in stone: it’s understandable if some market participants are wary of launching a new MTF or exchange until the future becomes clearer.

Will the new regulations reverse the benefits of MiFID I, taking the market back to centralised exchanges and limited choice? Some rationalisation is probably inevitable at some point, given the impact of new technology and the drive towards transparency. But the market has a phenomenal capacity to reinvent itself, no matter what the regulators throw at it.

“Rumours of the death of dark pools are greatly exaggerated,” says one broker. Faced with MiFID II’s insistence on 4% and 8% caps on dark trading, new alternative venues offering ground-breaking new products will continue to emerge, as existing incumbents and new players jostle for position. With the buyside now firmly in the driving seat, asset managers will be increasingly analytical about choice of venues and the costs and impact of trading. That means improvements on the value side and, in the case of the best venues, consistent quality emerging in terms of content and execution. In the words of one asset manager, “it’s all up for grabs.”

[divider_line]©BestExecution 2015

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Data management : Strategic data management

Ian Rycott

April 29, 2015

RAISING THE DATA BAR.

Heather McKenzie explains why data management is more than just a technology issue.

For decades, trading firms have heard the data mantra: “rubbish in, rubbish out”. If poor quality data is fed into trading, risk and reporting systems, poor quality decisions result.

For years, data was not considered to be an asset, let alone a ‘strategic’ one. Data used to be necessary to clear trades and feed risk management systems, but there was little or no impact of data on regulatory compliance. This has changed with the increasing amount of reference, client and market data that has flooded into financial institutions – often in duplicate – to comply with the new legislative environment.

It has also spawned a huge industry of data cleansing and scrubbing firms which is growing up out of the inability of financial institutions to better manage data and ensure accuracy. The old solution of flinging technology and bodies at the data management problem is becoming increasingly expensive. In addition, it is also coming under increased regulatory scrutiny. Financial regulators are implementing new requirements, particularly regarding trade reporting, across a broad range of market activities, asset classes and countries. These are proving to be a catalyst for firms to review their data management architectures.

One of the challenges is that firms have disparate data feeds and databases acquired either through mergers or restructurings. “Regulation is a catalyst for thinking about data more strategically,” says Bradley Wood, a partner at London-based GreySpark Consulting. “Many dinosaur City [of London] managers thought data was an IT problem. Now they are realising that data properly managed and exploited can yield returns.”

Grey Spark has issued a three-part data strategy report that addresses the issue of data as a strategic asset. “A strategic approach should seek to exploit data so that collecting and managing it effectively benefits the business rather than hinders it,” says the report. “Doing so means considering the data the business generates as an asset in its own right rather than as a regulatory liability or IT overhead.”

Viewing data as a regulatory liability is not uncommon, given the raft of rules that are being imposed on trading firms. The impact is particularly significant in the derivatives space with the European Market Infrastructure Regulation (EMIR) and the US Dodd Frank Act placing emphasis on trade reporting.

“Participants in the derivatives industry are required to focus on client and reference data for trade reporting,” says Virginie O’Shea, a senior analyst at research firm Aite Group. “The first round of reporting didn’t go well. Regulators could not understand data that was in different formats and were concerned there was double reporting in some cases. Regulators are now revising how they want firms to report to trade repositories.”

Another regulatory issue that is testing the data management strategies of firms is the Basel Committee on Banking Supervision’s principles for effective risk data aggregation and reporting, BCBS 239. Like many post-2008 regulatory initiatives, the principles were developed because of the inability of many banks to determine their exposure to Lehman Brothers. The recommendations “poke holes” in the way firms manage risk data, says O’Shea. The data, which could be client or securities identifiers, are often very poor. As a result, decisions on how to manage risk are based on unreliable information.

To meet BCBS 239 requirements, firms need to adopt consistent data reporting, says Chris Probert, a managing principal at global financial services industry consulting firm Capco. “Firms will be required to get trades into their trading and risk systems in a consistent and accurate way,” he says. “This comes down to data lineage – understanding where data comes into the trade book and how it is used, enriched, augmented and stored.”

Lessons learnt

Very often financial institutions address regulation on a first come, first served basis. The most pressing requirements will be addressed first. This is changing, according to John Randles, chief executive at enterprise data management firm Bloomberg PolarLake. “The requirement to report to trade repositories has had a knock-on effect to other data sets such as reference, pricing, holding and positional data. New securities master file projects are being driven by the need for better securities master data, linked to EMIR reporting.”

While in the past the front office was not particularly concerned about the securities master data, EMIR and BCBS 239 mean that firms are more focused on ensuring the inputs into their risk management systems are robust and the governance is strong. “We see more firms looking to put together a data fabric and governance that will meet many regulatory requirements,” says Randles. “Firms no longer have the resources to treat each regulation as a separate project.”

Regulators want to know at any point in time how a firm priced a stock, who touched the trade and how traceable the transaction is. “Regulators are looking for confidence in the trading process. In order to meet this requirement, firms are focused on developing data governance strategies that will stand the test of time,” he adds.

Regulations are raising the bar on data governance practices, says Paula Arthus, president and chief executive of Omgeo, a subsidiary of the US Depository Trust and Clearing Corp. “Many firms have a fragmented view of their client data, which has evolved over time to support their business and products. There is now a lot of activity around data discipline and rigour to develop a strategy that will provide a holistic view of data.” Not only will this help firms to comply with regulations, it will also improve analytics and deliver more accurate information into risk systems.

Cultural shift

While data management is supported by technology, Arthus stresses that the business side of a firm also must be involved in any data management strategy. Firms are beginning to appoint chief data officers in recognition of the importance of data within a firm.

“The data management now required is beyond technology – firms cannot just throw technology at it,” says O’Shea. “A data management strategy needs to be bottom up and top down. The people who input data are not necessarily data management staff – they are most likely to be from the business side. It has to be explained to them that inaccurate data entry is a problem for everyone throughout the organisation.”

Firms that regard data management as a technology problem are “making a big mistake”, says Wood. “There needs to be a change in behaviour in financial firms. Much of the data is poor and data cleansing and scrubbing is a significant drain on resources; it should not need to be done.” Bad practices and erroneous decisions have led to “armies” of offshore resources being deployed to massage data. He adds there has been an “accumulation of bad decisions made in data management over the decades”.

With the ‘data deluge’ set to continue, according to GreySpark’s report, it is “critically important” that all firms have a strategic response. “For a bank, having a strategy to manage exponential increases in the size of the data created means having the ability to leverage reliable, timely data in order to increase revenues, facilitate strategic objectives and to cut costs.”

Implementing an effective data strategy will require both investment and cultural change, some of which can be painful, but as GreySpark points out, strategic data management is an imperative that, if ignored, will threaten a bank’s survival. Strategic data management leads to a better understanding of the client base. The banks that can use their data to predict and service client needs will emerge as the dominant market players.

©BestExecution 2015[divider_to_top]

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Equities trading focus : Overview : Lynn Strongin Dodds

Lynn Strongin Dodds

April 29, 2015

NO TIME TO CATCH YOUR BREATH.

Lynn Strongin Dodds looks at how the raft of regulation has altered the equity trading arena.

Although the financial industry looked at MiFID I with trepidation, it had no idea of the ensuing storm of regulation that was to be triggered by the credit crunch. Altogether, they fundamentally altered the equity landscape spawning different trading venues, strategies and market participants. Infrastructure had to be revamped, technology upgraded and value propositions re-evaluated especially on the investment banking front.

If that were not enough, there is little breathing space as MiFID II is just around the corner. “I think last year sell and buy side firms were trying to understand and position themselves for MiFID II,” says Per Lovén, head of corporate strategy EMEA at Liquidnet. “The major impact to the market regarding secondary trading is the volume caps in relation to reference price and negotiated trade waiver as well as changes to broker crossing networks. Regarding the volume caps, it would be naïve to expect all trading ending up in lit markets when or if a cap is breached. Rather ironically, this change, which is driven by an attempt to increase transparency may actually make the market less transparent. A large portion of trading that was happening in dark MTFs may not end up on the lit markets but instead be traded OTC, SI or simply disappear.”

In many ways, dark pools could revert back to their original function as venues for the larger trades as they are exempt from the volume caps of 4% per venue and 8% across all dark pools under the reference price pre-trade transparency waiver. Any stock that breaches the limit is banned from trading in the dark for six months and its trade will have to move to lit venues such as stock exchanges.

Numbers crunched by Rosenblatt Securities show that dark venues accounted for just over 6% of European equity trading last year. The figure though does not include data from all broker-run dark pools, which, if included, could increase their contribution to over 10%.

One of the motivating drivers behind the greater transparency is the behaviour of high frequency traders which was highlighted in US author Michael Lewis’ Flash Boys in March 2014. They have long been under the spotlight but Lewis’ book alleged that they were rigging the markets. Some institutional funds have stopped trading in some of the biggest dark pools because they feel that they are being undercut by these firms who catch on to their trading strategies.

Laying the groundwork

The industry is not waiting for 2017 to arrive and is already preparing for a brighter world. “Markets are already adapting,” says Brian Pomraning, head of equities execution services in Europe, the Middle East and Africa at J.P. Morgan. “The buyside trade on lit and dark venues for different reasons and the caps do not mean there will be an end to dark trading. Instead, the pendulum is swinging back from the smaller execution sizes that we have seen over the past few years and we’re observing a gradual increase in dark fill size in some venues along with growth in the use of conditional orders.”

He adds: “Typically clients have and still do rely on high touch trading desks to cross large blocks of stock but increasingly there is a trend for more electronic solutions which act as a complement to high touch desks to identify crossing opportunities.”

In response, J.P. Morgan has debuted a conditional order type with its AQUA algorithm which works orders on lit and dark venues while also searching for block liquidity opportunities. If a suitable block is found, it can cancel orders being worked elsewhere to be executed on JPM-X. The US broker along with Barclays, Instinet, ITG, Morgan Stanley, Neonet and Société Générale, Bank of America Merrill Lynch, Citi, Deutsche Bank and UBS have also lent their support to the London Stock Exchange Group-owned Turquoise’s Block Discovery which was launched last October.

The service enables market participants to buy or sell a large block while also seeking smaller trades to be executed if the block trade does not find a match. If there is a pairing, then the deal is sent via a randomised auction service, which tends to last between 5-45 seconds, thereby discouraging HFT players. Since its launch, the average trade size executed through Block Discovery has been around €261,000 while the largest trade size executed so far was worth €3.29m.

Others are also hoping to join the fray. For example, Nasdaq is in discussions with its members and buyside firms about increasing the trading of larger-sized orders on Nordic@Mid, its Nordic dark pool while Euronext is also mulling over its options to attract more block trades to its venues.

There are also industry led solutions such as Plato which has both buy and sell side backers including some of the same sellside names on Block Discovery such as Barclays, J.P. Morgan, Morgan Stanley, Citi as well as Goldman Sachs plus luminaries from the buyside including Deutsche Asset & Wealth Management and Norges Bank Investment Management.

Unlike the other initiatives, it is a not-for-profit trading venue focused on large-sized trades with part of the proceeds being slated to fund academic research into finding ways to improve trading. Although there have been endless reports into the effects on markets of controversial trends such as HFT or dark pools, market participants and academics alike admit the findings have been incomplete due to a lack of extensive and high-quality data available for study

“There is definitely a new dynamic between the buy and sell side,” says Paul Squires, head of trading at AXA Investment Managers. “There is a lot of innovation on both sides but I particularly like the Plato Partnership because it is a genuine buy and sell side collaboration and a not for profit utility.”

Unbundling

The shifting nuts and bolts of execution though are only one component of the regulatory overhaul. The other major focus area is the payment of broker research. It has been a long running theme in the UK ever since the Myners report fifteen years ago but it has also come under the gaze of the European Securities and Markets Authority (ESMA) which is providing the guidelines to MiFID. The problem though is that the two regulators do not see eye to eye with the UK’s Financial Conduct Authority advocating a total split between research and execution while the Europeans stop just short of an outright ban.

“There is a big disagreement between the UK and the continent over unbundling,” says one European head of electronic trading sales at a major broker dealer. “I would say most UK firms are farther ahead and have commission sharing arrangements (CSA) in place while those on the continent have different approaches. However, it will be a big change if research is paid for out of the funds or client money. It is not clear though what the outcome will be.”

Squires adds: “The UK asset managers were generally ahead in terms of adopting unbundled practices but the regulator has observed that some firms were not so robust and there was not enough unbundling. It wants the industry to get to the right place for its clients. It is unclear what the outcome will be between the FCA and ESMA interpretations (segregated research payment accounts or enhanced CSAs), but either way it will be a huge administrative burden on the buyside.”

There is much less division over the methods to improve best execution. Both MiFID II and the thematic review undertaken by the FCA are taking a much harder line. The Europeans are requiring firms to take all sufficient steps to obtain, when executing orders, “the best possible result for their clients taking into account price, costs, speed, likelihood of execution and settlement, size, nature or any other consideration relevant to the execution of the order.”

Meanwhile UK firms are being told to “improve their understanding of the scope of their best execution obligations, the capability of their monitoring and the degree of management engagement in execution strategy.”

Not surprisingly, against this backdrop, the relationship between the buy and sell side has and will continue to evolve. Asset managers are increasingly executing more flow themselves, building their own algorithms and developing new tools to measure broker performance. “It is a natural reaction and the buy side over the past two years has increasingly taken greater control of its destiny,” says Lovén. “They want absolute transparency over the execution of their orders and are using technology to interact with the market directly.”

Simon Maughan, head of product specialists at OTAS Technologies, adds: “I think we will see the rise of more buyside trading platforms as firms look to avoid using algos which they see as an expensive commodity. There will be a few launches and then as with most industry initiatives there is likely to be consolidation. The buyside will also be monitoring broker performance much more closely and will be looking for pre trade and post trade analytical tools to better measure them.”

“There are so many regulatory headwinds that it is making it increasingly difficult for the sellside to make money,” says Michael Horan, head of trading services at Pershing, a BNY Mellon company. “They have been forced to close their prop desks and now there will be stringent controls on BCNs. I think what we will see is firms focusing more on providing technology aided trading solutions such as algos, direct market access and block trading platforms as well as execution consulting services.”

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Equities trading focus : Benchmarking : Darren Toulson

Ian Rycott

April 29, 2015

BENCHMARKING OPPORTUNITY COST.

TCA usually focusses on analysing the trades that you do execute, but what, asks Darren Toulson, Head of Research at LiquidMetrix, about the ones you don’t?

Macro level opportunity costs – partially done orders

A buyside trader passes three orders to trade 100,000 shares in the same stock on the same day to three different brokers each using different algorithms. Broker A gets the whole 100,000 shares done with an Implementation Shortfall (IS) cost of 150 BPS. Broker B only manages to get 80,000 shares done with an average cost of 100 BPS for the shares she did execute. Broker C, using a passive Dark Algo with strict limit prices, only gets 10,000 shares done but with an IS of 0 BPS.

Which broker did the best job? If we only look at executions and ignore the unfilled parts of orders then, averaged over many orders, C will probably appear best and A worst in any TCA reporting. But is that fair?

The answer depends on what the buyside was trying to achieve. Was it vital to get the shares done by the end of the day at almost any cost or would it be better to not execute at all if price impact is too high or prices moved too much? Let’s assume the buyside really did want their order fully executed fairly urgently.

One way of trying to normalise the performance of the three brokers above would be to add in an opportunity cost for brokers B and C, penalising the unfilled portion of their orders. The simplest way to do this would be to ‘virtually fill’ any unexecuted shares at market price at the end of the order period and use those fills in our IS assessments.

This sounds OK in principle but what if Broker C only got 10% of the order done; how realistic is it for the remaining 90% of the order to be done in full at the market bid/offer price by the end of the order?

A more sophisticated way of measuring the opportunity cost might be to assume that the unexecuted part of the order should be completed by participating in, say, 10-20% of all public trades that occurred following the end of the order. But even then, we would not accurately reflect the impact/IS cost that those trades would have if done aggressively by Broker C. We could try to take this impact into account by running a pre-trade impact / risk model to estimate the effect of executing the remaining shares of an order and adjust IS accordingly.

The most appropriate way of adding in an opportunity cost element to TCA analysis will depend on the principal trading objectives of the buyside trader, so there is no single ‘best’ solution here. However, completely ignoring unexecuted volumes can lead to a skewed view of relative TCA performance.

Micro level – limit order benchmarking

Missing out opportunity costs in TCA analysis is not just a concern at the parent order level. At the order routing / fill level, ignoring opportunity costs can give equally misleading results, especially when trying to quantify the benefit of using passive limit orders.

Imagine we are running a VWAP algorithm and need to buy 500 shares at some point in time. Assume current EBBO prices are bid 99 / offer 100 and consider four possible trading outcomes:

We could immediately trade 500 shares at the aggressive lit market price of 100.
We might post 500 shares passively at the best bid price of 99 and get filled almost immediately, achieving a price of 99.
We might post at 99 but the bid then moves away (rises) from our order and we then ‘chase’ the best bid (repost) up to a price of 101 before finally getting filled at 101.
We post at 99, the market bid rises up to 102, but after 10 minutes we’re still unexecuted and are forced to cancel our passive order and aggress the market crossing the spread and executing at 103.

Two key aspects to analysing the micro performance (real spread capture) of limit order posting strategies are:

The limit order price achieved should be compared against the aggressive price that could have been obtained when the order was first submitted.
If any of our limit orders fail to get fully filled, we need to account for the opportunity costs. The best way to do this is to assume that the remaining shares must be purchased at the current aggressive EBBO price.

Figures A to C illustrate the importance of doing the analysis right. Figure A shows EBBO spread capture measured at the time of execution (all 100% or more).

Figure B similarly shows results for spread capture based on the EBBO price at the time of order submission rather than execution and gives slightly more realistic numbers but still doesn’t account for unexecuted orders.

Finally, in figure C, we see the effect of properly adding in opportunity costs for executed orders. The impact is dramatic: the average spread capture in C is now just 6% and we see a large number of orders where the achieved price is worse than the price that could have been obtained by simply aggressing the market at the time of passive order submission.

However, the overall average spread capture figure of 6% in C is REAL. Any value greater than 0% demonstrates a positive benefit obtained through use of passive orders; a negative value hints that overuse of passive orders is actually harming overall performance.

Conclusion

TCA isn’t just about the trades you do execute, but also the opportunity costs of those you don’t. If you aren’t properly accounting for opportunity costs you might be unfairly favouring algorithms that are very passive but don’t always result in fully filled orders.

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Equities trading focus : Best execution : Samuel Lek

Ian Rycott

April 29, 2015

Lessons from America

In order to accomplish best execution in Europe we should consider the US perspective argues Samuel Lek, Chief Executive Officer at Lek Securities.

What are the obstacles to best execution in Europe?

MiFID requires that a broker obtain “Best Execution” for its customers. Without a doubt, this is a most laudable goal. The term sounds admirable and why would any customer be satisfied with anything less than best execution?

But in Europe, how to accomplish best execution and demonstrate to a client that he received the very best price available creates a lot of uncertainty due to markets being less transparent.

What can we learn from the US experience?

In the United States, Congress mandated a Consolidated Quote System (CQS). All exchanges are required to publish their bids and offers to a centralised location and anyone subscribing to the system can see which exchange is publishing the highest bid and the lowest offer. This transparency is a good thing, because markets work best when all interested buyers and sellers come together in a centralised location. Since ancient times, almost every European town and village was built around a market in the centre of the community where buyers and sellers could meet to trade their wares. The same is true for the financial markets.

Fragmentation, the establishment of many markets with poor communication between them, makes it difficult to find the best price. For many years, this was the reasoning that the London and New York Stock exchanges used to justify their monopolies in trading stocks.

However, allowing the major stock exchanges to operate as monopolies has been shown to have its own problems. As one might expect, monopolies result in high trading fees and an unwillingness to embrace new technology. The Consolidated Quote System is an elegant solution which attempts to address the seemingly conflicting goals of centralising the financial markets, without creating monopolies.

Exchanges compete to display the best possible prices, and because clients have a choice in where to send their orders, given the same displayed price, the client will have an incentive to send the order to the market that charges the lowest fees. This accomplishes centralisation of price discovery whilst maintaining competition between exchanges. The client can obtain the best price, across all market centres.

How can things be improved in Europe?

In Europe, quote publication is more fragmented and knowing where the best price can be obtained is more difficult to determine. Undoubtedly, the establishment of a pan European Consolidated Quote System would be a major improvement, but it’s not likely to become a reality in the near future. In the absence of this however, brokers should closely monitor available prices on major exchanges, before deciding where to send a client’s order. Clients can hardly be expected to do this themselves as having access to multiple quote feeds is not realistic for a retail client, but their brokers can provide a valuable service here. As a broker, this is certainly one of our top priorities.

In the absence of a CQS what else should we be looking out for?

Clients should also be aware of signs of what we believe are red flags which can be highly suggestive of something less than best execution. Payment for order flow is, in our opinion, something indicative of the possibility that the client’s interests are not being served in an optimal way. When a market maker is willing to pay a broker for the opportunity to sell stock to a client, this is highly suggestive that the market maker is not giving the client the best possible price. In fact, the market maker is probably reasonably sure that he can sell stock to the client and subsequently buy it back for his own account at a cheaper price and thus pocket a profit. In fact, he is so confident of this that he is willing to offer the broker compensation for routing the client’s order to him. I consider this to be a conflict of interest. At my firm we do not seek payment for order flow and when we nevertheless receive it, we believe that this compensation belongs to the client. We believe that the broker owes the client a fiduciary duty and that we should not place our own interest in receiving payment for order flow ahead of our clients’ interest in obtaining Best Execution.

What advice would you give potential clients in Europe?

Caveat Emptor! Clients that cannot self-direct their orders should ask their brokers where their orders were sent and whether or not the broker received compensation. i.e. payment for order flow for the order. Clients should consider selecting only those brokers that place the clients’ interest first and that seek only to obtain best execution, even if this means paying a slightly higher commission.

We are proud to offer a bespoke service that accomplishes just this goal. As an agency broker and clearing firm, we are able to ensure best execution for our clients. In addition, our agency-only approach removes any conflict of interest that many banks with proprietary desks face. By using a broker that allows clients to self-direct orders, traders and managers know that they are achieving best execution for their clients.

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Equities trading focus : Venue analysis : Ian Domowitz

Ian Rycott

April 29, 2015

“I’m shocked, shocked to find that [TCA] is going on in here!”¹

By Ian Domowitz*

When gambling is relabelled as just card playing or dice rolling, TCA may finally become Transaction Research. TCA has penetrated portfolio construction, fund capacity analysis, liquidation studies, fund NAV determination, trading strategy, and real-time decision support. It was a big surprise when I heard the comment, ‘venue analysis is not TCA.’

Venue analysis is an old theme. Exchanges fought over relative costs of execution, motivating academic work making the comparisons. With the arrival of electronic venues, efforts concentrated on explaining the mechanics of execution, followed by contrasts of execution quality on electronic and floor systems. Venue quality reporting via regulatory mandate appeared. The interaction of dark pools with routing schemes generated work on information leakage. Comparisons of lit and dark markets began. Flash forward to present day, and the furore surrounding Flashboys has generated collective amnesia with respect to our knowledge of venues over the past twenty years.2

Viewed through the lens of TCA, venue performance cannot be separated from trading strategy, market conditions, or even constraints on workflows. Venue analysis is most useful when set in the larger context of overall performance. Understood in that light, a better grasp of routing practices and performance permit traders to use the suite of tools at their disposal effectively, as well as generating more useful conversations with their brokers.

Trading strategy and venues

Consideration of trading strategy is an essential component in assessing venue performance. Without controlling for strategy, it is impossible to construct comparisons of individual venues, or contrast dark versus lit markets in the aggregate. Yet, the work we see on quality of execution by venue appears to ignore this simple TCA-inspired insight.

Trading strategies can affect venue analysis in several ways, given the profile of fills flowing back to the algorithm from routing information, and disparities in how strategies cycle orders into the markets. Routers may be tuned to favour certain venues depending on strategy. Venue types are characterised by different mixes of strategies which feed them.3

Some disparities across strategies are intuitive. Scheduled strategies favour lit markets, while dark aggregator strategies dominate in dark pools. The main point is that the distribution of strategy usage across venues differs, which in turn colours performance.

Fill size is a performance metric, but may also be a characteristic stemming from segmentation of participant types in any given venue. We cannot observe segmentation directly. Fill size is traceable to the nature of strategies, however, given the interaction of fills with sizes determined by the strategy itself. The disparity across venue types is illustrated in Figure 2.

The two boxes contain the top ten venues for each strategy by volume traded in our sample. Consistent with the evidence in Figure 1, not all venues appear in both boxes, and the ordering is different. The distribution of fills depends on strategy. A comparison of the same venue across strategies also is different. The distribution of fill size within the same venue depends on strategy. One cannot simply compare fill sizes across venues without taking the trading strategy into account.

Common performance metrics

If venue characteristics vary across strategies, performance comparisons also must be affected. Even the simplest performance statistic, average spread capture, varies across venues by strategy. Differences in spread capture for lit markets vary by as much as 45 percent in the US, for example. Dark market spread capture differs by 46 percent across strategy types.

In terms of the “classic” implementation shortfall measure, variation across venues is traceable to trading strategies, as opposed to distinct properties of the pools themselves.

In fact, the use of implementation shortfall for venue analysis, aggregating over strategies, is generally incorrect. Given the idiosyncratic nature of time stamps in trading systems, calculation of implementation shortfall cost is typically possible only when a broker strategy is considered. For this reason, many have resorted to reversion metrics, which depend only on a snapshot of price, at and after, an individual fill.

Reversion measures differ by the time after the fill. The idea is that if a great deal of reversion is exhibited in price over very short time horizons, then the fill is bad relative to what might have happened in the absence of toxicity in a venue. While price reversion may simply be representative of liquidity conditions, this metric is still widely used as a proxy for toxicity.

The differences across strategies, within and between types of venue, are evident. Within lit markets the reversion due to scheduled and opportunistic strategies is different by a factor of five. The difference in cost for dark pools across strategy types is as much as 200 percent. Most of such deviations jump right off the chart.

A last look

Space constraints prevent the illustration of results by venue. The differences in comparisons by strategy across individual venues are evident in an examination of the tails of the price reversion distribution, for example. There are large percentages of poor outcomes, in the case of implementation shortfall strategies, which do not appear in results aggregated across strategy types. The tail of the distribution for reversion in the dark, using dark aggregation strategies, is much smaller. Performance around zero reversion improves in that case.

Consideration of trading strategy is an essential component in assessing venue performance. This is true when attempting to compare and contrast different market structures, and also for assessing venue quality on a disaggregated basis, within market structure categories. The results suggest that proper “tuning” of routing functionality to strategy may improve performance. A proper treatment of this suggestion is a natural next, and constructive, step in venue research.

*Dr Ian Domowitz is Managing Director, Investment Technology Group, Inc. This article is based on joint work with Kristi Reitnauer and Colleen Ruane.

Footnotes

Apologies to Casablanca and the back room of Rick’s Café.
See “Garbage In, Garbage Out: An Optical Tour of the Role of Strategy in Venue Analysis.”
Algorithms are aggregated across brokers into several categories. Scheduled strategies include VWAP, TWAP, and Participation strategies. Dark denotes a liquidity-seeking strategy concentrating on dark pools, while opportunistic is general liquidity-seeking in nature. IS is shorthand for implementation shortfall, creating execution patterns based on cost and risk minimisation. Non-algo in the charts is generally desk trading, while Other is dominated by direct market access. The data used here is sourced by ITG, covering a spectrum of buy-side firms and their brokers, for the period 2013:Q2 through 2014:Q2.

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Equities trading focus : The buyside trading desk : Peter van Wely

Ian Rycott

April 29, 2015

Future possibilities

Peter van Wely, head of InfoReach EMEA and Asia, dusts off the crystal ball to divine what the buyside trading desk of the future might look like and suggests it will have to handle more than just equities.

Now the credit crunch crisis is mostly behind us, and businesses are looking forward again, it’s a good time to take a look at what the near future has in store for the trading desk.

A trend that has gathered pace is a more demanding, efficient and result-oriented buyside trading desk that is acting more independently and with greater self-confidence. What are the drivers and what are the instruments one can use?

The crisis certainly played a part in forcing a look at costs, but resulted mainly in consolidation and the popping up of boutique firms among the sellside, and more demanding and critical investors. The other drivers are the increased globalisation of order flows and assets, increased interconnection and correlation between asset classes and investments, the development of new technology and of course the impact of regulatory changes like EMIR/MiFID I, and now II, and Dodd-Frank.

Looking too far into the future is risky, so I’d like to look at some examples and ideas about how one can take advantage of the above trends and developments in the near to medium term.

First, there is a lot of talk of multi- or cross-asset desks. While I don’t think this will apply to the sellside, it certainly is a trend that is just beginning with the buyside. This has to do with the increased correlation between different asset classes, greater use of derivatives and better efficiency. Key to this is faster and smarter communication between the traders, which will have a far more influential role than in the past.

Second is the need to be able to prove execution quality to your investors and to monitor the sellside. Ultimately this means the buyside will have to have its own TCA tools, and not just pre- and post-trade, but also at-trade or real-time. Other decision-making and analytical tools will also become more important if you want to be that savvy independent buyside desk. Think of risk control tools in your front-office, heat maps to see where and how you are trading, lightning fast aggregation and dissemination of data. This then needs to interact flawlessly with your market data and graphs to enable both a real-time, top-level view and a drill-down view of your trading. And of course seeing real-time visualisations of how you are trading against your set benchmarks.

The last important factor is technology and the cost of technology. The last few years have seen a maturing of technology but also of the technology know-how in buyside dealing rooms. Where in the past the buyside was dependent for this on the sellside, I have seen a remarkable shift which started at the hedge funds. However, this is not universal, and without wishing to offend, at certain firms, especially asset-managers and pension funds, I still see a lack of knowledge of trading technology and algorithmic trading. A fair number are still completely dependent, in all regards, on the sellside and have multiple trading systems which really have a negative impact on their efficiency and transparency. Nowadays trading technology is much more scalable, flexible and easier to implement than before – as well as being cheaper. Having good and flexible trading technology combined with some knowledge, rather than killer contracts, goes a long way to having a cheaper, more flexible and independent buyside trading desk.

So how does this translate to your trading desk?

Let’s start with the human factor. The desk of the future will be more multi-asset and integrated. You will need much faster and smarter communications between your traders. They will need to specialise and be able to multi-task. They need to monitor and co-ordinate the broker relationships in a flexible and synchronous way. They need to ask “When do I trade high-touch?” and “when do I trade low-touch?” And “does my broker have the good high-touch guys?” They need to have some understanding about the technology and reassess their execution management systems (EMS) regularly. A possible change will be the complete unbundling between research and commissions. A lot of buyside firms take an EMS for example because it is “free” (which means paid for by the broker), but they do not look at this critically and separate costs from the inflexibility and dependence that comes with it. I think that will change. A good trader with independent tools will make a difference and can make higher returns for his clients.

What does the trader want on his desk to help him succeed? For one thing he (or she) wants a system that has a very scalable architecture and is truly configurable. Why? Because it has consistently to meet the traders’ specific needs and address changes in these needs. In addition it has to be able to simplify the workflow and integrate easily with other systems. You do not want to be totally dependent on one broker, neither do you want this with an EMS. A trading system needs to be able to deliver on the above trends and wishes such as multi-asset, TCA, transparency, decision-making and analytical tools, excellent and easy integration with brokers/MTFs and their algos. It also has to have an open application programming interface (API) where they can easily programme their own strategies and algos. On your desk your system should be able to monitor and implement a policy of minimising transaction costs, impact, and maximise performance (and prove it). A good real-time audit trail is very important in this regard.

Last but not least, trading among different venues across multiple assets – high-touch and low-touch – and automating as much as possible requires a total integration of your desk and real-time normalisation and aggregation of data in a visualised way. Otherwise you will lose track.

So, although some of the drivers described will hardly come as a shock, I would say that the combination of further best execution, increased interconnection and correlation of asset classes as well as the maturing and decreasing cost of technology will have the most effect on your desk in the near future. In order to service the increased transparency and insight being demanded by investors and management, you must re-assess your trading desk.

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MOVING GOAL POSTS.

David Miller, head of EMEA equity trading, Invesco explains how the buyside is changing the rules of the game.

How is the trading function structured at Invesco and what is your role within that?

There has been a lot written about the changing relationship between the buy and sellside. How do you feel it has altered? Is the buyside taking more control over the order flow?

I read that you feel algos have become more commoditised. Why do you think that?

What impact do you think MiFID II will have on the industry especially the caps on dark trading?

Do you think that best execution has improved since MiFID I?

What do you think of the buyside platforms such as Plato and Luminex? Will they help in mitigating liquidity risks? Will it stop HFT from gaming?

What do you see as the biggest challenges and opportunities for 2015?

Trader voice revolution

Gareth Malone and Duraid Haddad, Founders of LINX Networks spoke to Best Execution about a revolution that’s happening on trading desks across London.

IP Trade T4 Turret

IP Trade’s new T4 turret offers offers trading professionals a comprehensive, streamlined trading turret communications experience.

User features:

NEVER A DULL MOMENT.

Louise Rowland assesses the fate of the trading venue.

WHERE EQUITIES LEAD.

Will the changes in equities trading venues be mirrored in other asset classes, as the regulatory push to trade on-exchange continues?

RAISING THE DATA BAR.

Heather McKenzie explains why data management is more than just a technology issue.

NO TIME TO CATCH YOUR BREATH.

Lynn Strongin Dodds looks at how the raft of regulation has altered the equity trading arena.

BENCHMARKING OPPORTUNITY COST.

TCA usually focusses on analysing the trades that you do execute, but what, asks Darren Toulson, Head of Research at LiquidMetrix, about the ones you don’t?

Lessons from America

In order to accomplish best execution in Europe we should consider the US perspective argues Samuel Lek, Chief Executive Officer at Lek Securities.

“I’m shocked, shocked to find that [TCA] is going on in here!”1

By Ian Domowitz*

Future possibilities

Peter van Wely, head of InfoReach EMEA and Asia, dusts off the crystal ball to divine what the buyside trading desk of the future might look like and suggests it will have to handle more than just equities.

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“I’m shocked, shocked to find that [TCA] is going on in here!”¹