Previous People In The Trade

Published on July 25, 2008.
Although exchanges will have to change their competitive mind-set to hold on to liquidity, Lee Hodgkinson, CEO, SWX Europe, feels that the demise of the exchange has been greatly exaggerated. As long as exchanges embrace the changing landscape and do not fear it, Hodgkinson believes they will be in a good position to compete with MTFs.

Read the Interview

Published on July 21, 2008.
The concept of best execution is well-established in the equities markets, not least because recent regulations, such MiFID in Europe and Reg NMS in the US, demand it. It has also been prevalent in the US listed options market for many years. But best execution is also spreading to other areas of the listed derivatives market, according to Sabrina Belkadi, executive director, Goldman Sachs Electronic Trading.

Read the Interview

Published on July 14, 2008.
As the strategies of hedge funds and more traditional asset managers converge, three categories of buy-side firm are emerging, according to Dr. Anthony Kirby, director, financial services advisory, regulatory and risk management at consulting firm Ernst & Young. And occupying the middle ground in the battle for institutional funds, says Kirby, is a high return but also a high maintenance position.

Read the Interview

Published on July 7, 2008.
So long the only challenger to Europe’s stock exchanges, Chi-X will be joined by a new wave of multilateral trading facilities (MTFs) in the coming months. CEO Peter Randall asserts that the first-mover is still in good shape for the long haul.

Read the Interview

Published on June 27, 2008.
As more dark pools are launched in Europe to take advantage of post- MiFID liquidity fragmentation, when will liquidity sharing agreements reduce the buy-side’s connectivity headaches? Kyle Zasky, managing director, Knight Capital and co-founder of US agency broker EdgeTrade, warns that dark pools that are not open to connectivity will be left behind in the traders’ quest for best execution.

Read the Interview

Published on June 23, 2008.
Large investment banks have failed to recognise the value of their execution divisions, according to Richard Balarkas, president and CEO of Instinet Europe. “If they did,” he comments, “they would divest the business.”

Were the banks to take this route, the scale of business that the banks’ execution arms represent would amount to multi-billion dollar enterprises, he claims.

Read the Interview

Published on June 13, 2008.
When describing the future of execution algorithms, brokers and vendors often use the phrase ‘next-generation algorithms’. But what is the substance behind this catch-all term used to describe any new features that older algorithms lack? According to Rob Maher, head of Advanced Execution Services (AES) sales in Europe at Credit Suisse, the development of algorithms over the near term will follow three distinct paths.

Read the Interview

Published on June 6, 2008.
In the US trading environment, there is a vast array of execution venues. Coupled with this, trading volumes are skyrocketing, and there is a widespread and growing use of electronic trading techniques such as execution algorithms and automated alpha models. There are also finer tick sizes to contend with, following the decimalisation of the US equities market in 2001 and the options market in 2007.

Read the Interview

Published on June 2, 2008.
The buy-side should be wary of passing too much responsibility for MiFID compliance onto their brokers, according to Brian Sentance, CEO of analytics and data management firm Xenomorph.

Despite the upheaval surrounding compliance with Europe’s MiFID regulation, Sentance believes the buy-side is leaving the bulk of the work to the sell-side. Transferred responsibilities include part or all of best execution, and trade and transaction reporting.

Read the Interview

Published on May 7, 2008.
As the number of trading venues in Europe increases, pressure is mounting on the incumbent exchanges and multilateral trading facilities (MTFs) alike to offer features and tools that distinguish them from their rivals and attract clients. Artur Fischer, joint CEO of Börse Berlin Equiduct Trading, talks to theTRADEnews.com about his firm’s bid to set itself apart – its volume-weighted best bid and offer (VBBO) benchmark.

The idea behind VBBO is to gather market data from Europe’s main execution venues to determine the best overall price. “At the moment, we import real-time data from four exchanges – Euronext, Chi-X, Xetra and LSE,” explains Fischer. “If you combine these order books, then you can calculate the best possible price. By combining the different volumes of the different limits, you can achieve a better price all round.” The VBBO benchmark will also incorporate prices listed on Turquoise and Nasdaq OMX when they enter the market.

Read the Interview

Published on April 8, 2008.
MiFID has wrought many changes in the European equities market – some that the European Commission intended, and some that it arguably did not. What it has failed to do, according to Jean-René Giraud, business development director at the EDHEC Risk & Asset Management Research Centre, is spark innovation in trade execution.

Giraud contends that Chi-X Europe, for example, with its ‘taker-maker’ tariff structure, has brought some pricing innovation to the European market. But he adds, “As far as innovation in execution is concerned, we didn’t see anything. All the new initiatives are based on existing technology. No one came up with a new market model. No one came up with a new concept that dramatically changed what already existed on central exchanges.”

Read the Interview

Published on March 5, 2008.
There has been much talk in recent weeks of convergence between hedge funds and long-only buy-side managers. Yet the vast majority of the thousands of hedge funds in the marketplace do not deploy order management systems (OMSs) or have comparable regulatory and compliance concerns to more traditional long-only managers.

theTRADEnews met today with Stuart Calder, head of product strategy and management, Linedata Services, a provider of solutions to both hedge funds and long-only managers, at the TSAM event held in London, to ask how likely it is that, and how long it might take for, hedge funds to fully embrace more traditional long-only strategies.

Read the Interview

Published on February 12, 2008.
On 8 February, agency broker Instinet announced it was setting up Chi-X Global, a new holding company to house its Chi-X trading platforms. It also unveiled plans to create Chi-X Australia, which will complement Chi-X Europe and the soon-to-launch Chi-X Canada.

Tony Mackay, president and managing director of Instinet Europe, will become CEO of Chi-X Global. theTRADEnews asks Mackay why the new holding company was set up, and why Australia is the best place for Chi-X’s first foray into the Asia-Pacific region.

Read the Interview

Published on January 23, 2008.
On January 22, data provider Markit bought BOAT, a MiFID-compliant trade reporting platform, from the consortium of nine investment banks that set it up. The deal came only three months after the platform went live on November 1.

theTRADEnews met with Will Meldrum, managing director and head of BOAT at Markit, to ascertain the company's rationale for buying BOAT, and how the new ownership will affect the platform.

Read the Interview

Published on January 16, 2008.
The US Securities and Exchange Commission (SEC) is planning to allow US brokers to access foreign stock exchanges directly, reported theTRADEnews on 9 January.

theTRADEnews asks Adam Kinsley, director of regulation, London Stock Exchange (LSE), how likely it is that such a move would benefit the marketplace in general by allowing for so-called 'mutual recognition' of other countries' securities laws, eliminating the need for non-US exchanges to register with the SEC.

Read the Interview

Published on January 6, 2008.
The majority of Europe's brokers have proved reticent about opening up their dark pools of liquidity to each other and establishing systematic internalisers. theTRADEnews asks Alasdair Haynes, CEO of ITG International, whether he thinks Europe's brokers will enter into liquidity-sharing agreements in 2008, or whether the shift in mentality required for this to happen will be so great as to make further co-operation unlikely.

Read the Interview