BlackRock alumnus to focus on dealer selection and direct connectivity in new role at TS Imagine

New markets officer, Spencer Lee, tells The TRADE that bringing algo wheel-like dealer selection technology to the fixed income markets is a top priority.

A buy-side alumnus with over two decades of industry experience is set to overhaul the fixed income trading technology landscape as part of his new role as chief markets officer at OMS provider TS Imagine.

Former BlackRock director, Spencer Lee, who joined TS Imagine in September, told The TRADE that current fixed income trading technology had a way to go before it was fully meeting the needs of the buy-side.

“OMS’ do a lot of good things but struggle a little bit when it comes to pure execution and deep robust engagement with all the different liquidity venues in the marketplace,” he said.

“As fragmentation of liquidity in our marketplace has continued to increase, the time demands and the screen real estate demands of the buy-side trader have gone up. This generates a bit of chaos and sometimes focuses the minds of the traders on one venue because they know that that’s the one they can trust. When that happens, it comes at the expense of seeing possible valuable liquidity at another venue.”

Spiderweb

In the increasingly fragmented fixed income landscape, Lee confirmed TS Imagine remained focused on consolidating liquidity pools and venues into one single cockpit or “spiderweb”.

“EMS is not only about concentrating this fragmented marketplace but also bringing the data that does exist into an executable environment to be used as an alpha tool. The automated decision making that we’re building with respect to routing to different venues or direct to different dealers, all of that data will be used to drive these automated decisions it will be at least in the land of TS, customisable by the client,” said Lee.

“When you bring all of this liquidity information into a single view and make it available to the client for analysis, that’s where we get some really powerful decision-making tools. We refer to this as TCLA. Its transaction cost analysis with an L in there for liquidity. This gives you the ability to analyse all of your execution but also the liquidity content that can help drive decision making pre-trade.”

EMS adoption remains somewhat limited to corporates and rates due to a lack of electronification of some products in the fixed income space and Lee confirmed that product expansion was a priority for TS Imagine following his arrival. Automation, however, is the main focus for the firm in the next few years, with a particular focus on bringing dealer selection technology – better known as algo wheel tech in the equities markets – to fixed income. Lee confirmed it simply needed to be adapted to the nuances of the fixed income markets, taking account of the tradability of instruments versus others for example.

“As soon as orders show up I believe clients should have the ability to throw them into an auto router for protocol selection and/or dealer selection depending upon the best available liquidity at that moment in time but also to be able to tag it with the level of vigour that should dictate the behaviour down the line. These are all newer things I think for most of the fixed income marketplace,” said Lee.

“You can get into not only the referential pricing or levels but how you shade that pricing to put up on a number of different things like liquidity, risk reducing or risk increasing, what’s happening in the marketplace, broad market versus ticker specific that clients should have the ability to customise in my opinion.”

TS Imagine currently offers direct dealer connectivity with JP Morgan, Citi and Bank of America. In a blog published in October, Lee confirmed more names were expected to be added to the list going forward.

“Direct dealer connectivity is extremely valuable for the buy-side,” Lee told The TRADE.

“We want to make sure that they have choice in their search for best execution and the marketplace.”

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