Next up in our introduction to the distinguished nominees for the Leaders in Trading 2023 Editors’ Choice Awards, we bring you the shortlist for the Sell-side Market Structure Excellence category.
New to Leaders in Trading 2023, this category is designed to recognise those firms and individuals going above and beyond to service and support their clients in light of the numerous regulatory and market structure overhauls taking place across the globe.
Post-Brexit, divergence continues to play a part in the regulatory regime in the UK and Europe, while other major shifts such as the transition to T+1 settlement in the US are likely to significantly impact the way institutions operate.
In light of this, The TRADE has selected Goldman Sachs, Optiver, RBC and TD Cowen for the 2023 shortlist, following their efforts over the last 12 months.
Goldman Sachs
Over the last 12 months, Goldman Sachs’ market structure and regulatory team, spearheaded by chief operating officer for EMEA equity execution services, Eleanor Beasley, has continued to provide thought-leading content in the context of market structure changes in the EU and UK. Whether that has been covering consultation papers that continue to come from the UK and the EU, or highlighting changes in exchange offerings or migrations, the investment bank has provided insights on what it believes the impact is going to be and what is going to happen to the broader liquidity landscape as a result.
Alongside helping its clients to make sense of regulatory regime changes in Europe and the UK, Goldman Sachs has produced deep dives into regulatory updates and launched a new quarterly market structure podcast – ‘Evolving Equities’ – in which Beasley hosts a new external guest each episode. The quarterly content aims to provide clients with insights to better understand and navigate the equities landscape. Other regular content by Goldman Sachs includes weekly liquidity colour, monthly liquidity analysis, quarterly cost to trade analysis and quarterly developed vs emerging markets liquidity deep dives.
Goldman Sachs’ market structure team works as part of a broader team within the investment bank, including the quant analysts and its SOR strategy team to ensure that market structure and information received from regulators is an integral part of its broader liquidity strategy.
Optiver
With former TRADE reporter and Rosenblatt analyst, Anish Puaar, at the wheel, non-traditional liquidity provider Optiver has made a significant push into the thought leadership sphere in the last 12 months, aiding both its own counterparties and firms across the wider market in their understanding of the shifting market structure and regulatory landscape.
In the last year, the market maker has published whitepapers and spoken at industry conferences on a variety of topics including: the “anti-competitive nature” of single market-maker exchanges, the benefits and risks of Europe following suit with the US in the pursuit of T+1 settlement, the international financing review (IFR), closing-auction outages and market-maker protections in the options market. As well as the history and uses of short-term options, capital markets recommendations for incoming EU policymakers and the Asia-pacific equity options markets.
The market maker has also introduced a quarterly market structure newsletter for trading counterparties, highlighting statistics like liquidity and trading spreads across cash equities trading venues, and published comment letters on Securities and Exchange Commission (SEC) equity market structure proposals. Optiver is committed to voicing its opinion in industry bodies and at industry forums and conferences. Subscribers to the market maker’s Insights email list are up 39% this year, Optiver confirmed.
RBC
Headed up by global head of market structure, Rich Steiner, with consultants on the ground in Europe such as former TRADE editor, Hayley McDowell, RBC’s global market structure team provides insights and content on key themes and trends to assist clients with their execution processes and decisions. They produce monthly recaps, key development notes and in-depth reports on market structure themes which are distributed regularly to clients, as well as curated content on client request.
The team collaborates closely with product to develop the algo suite and logic based on regulatory, liquidity and other market structure changes to improve performance, reduce costs and increase efficiency for its clients. Current themes of focus include liquidity shifts, AI and machine learning, T+1 settlement, upcoming changes to Mifid II research rules and market outages.
Earlier this year, RBC’s Digital Solutions and Client Insights (DSCi3) business expanded Aiden, its proprietary AI-based electronic trading platform, into Europe. The tool is designed to reduce slippage against the volume weighted average price (VWAP) benchmark while minimising market impact. According to RBC, it’s market structure team played a key role in Aiden’s implementation by ensuring the algorithm leverages the nuances of the European trading landscape and informing clients of Aiden’s capabilities and logic with the product and coverage teams.
TD Cowen
TD Cowen’s market structure offering is spearheaded by former Citi, LSEG and Turquoise alumnus James Baugh, now head of European market structure for the firm. TD Cowen, part of TD Securities, aims to put market structure at the core of its electronic trading business. The market structure offering provided by the institution is a “linchpin for liquidity strategies and a driving force behind its distinctive algorithmic trading offerings,” TD Cowen told the TRADE.
The TD Cowen market structure team provides opinions and insights into regulatory and market structure changes, adding depth, perspective and practical value by illustrating how these changes directly affect day-to-day business. The firm also regularly distributes notes and updates to the buy-side community. These updates cover a wide range of topics, such as the implications of diverging regulations post-Brexit, the re-bundling of research, the ban on payment for order flow (PFOF), primary market outages and data centre moves.
Actively engaged in discussions on key topics impacting the industry, TD Cowen participates in most major industry forums and conferences, reaching markets across the continent and as far afield as South Africa. Its involvement with Q15, where James Baugh serves as an advisor to the Equity Quorum, emphasises its role in shaping industry dialogue.