In one of his first moves in the role, the newly appointed Neonet Securities CEO has shut down the firm's New York trading desk.
Last week, Joacim Wiklander replaced Fredrik Lindqvist as the helm of Swedish agency broker Neonet, which merged with trading solution vendor Orc Software last year.
As part of his mandate to cut costs and consolidate operations to Stockholm, the New York-based trading facilities were no longer seen as relevant, Wiklander said.
“[Orc and Neonet] have had operations in New York for a long time and they have served their purpose, providing US execution for European clients, while also selling European execution to North American firms,” said Wiklander. “The sales operation is still relevant but US execution was never a core piece of the business and we can accomplish what we need through our partners in the US.”
Neonet will extend its trading hours in Stockholm to manage US trading.
“Certainly there are cost savings in the move but we are doing what we are encouraging our European partners to do – concentrate on their core activities and provide better service for their clients,” said Wiklander, admitting the closure would mean redundancies for the business.
“This is a new strategy for a very turbulent and challenging time in the investment world,” he said. “Volumes are low and banks and brokers are suffering in this trading environment.”
Wiklander said execution was becoming more of a ”commodity' and not all banks and brokers could no longer differentiate themselves adequately in the space.
“Execution capabilities are costly and complex to maintain, which is why we believe we can partner with our banking and broking customers so that they can concentrate on their own core competencies of servicing their clients,” he said.
The 2010 merger of the two Swedish companies, totalling SKR 1.2 billion in shares, aimed to bring together Orc's derivatives trading knowledge with Neonet's equities trading expertise.
Wiklander was formerly chief strategy officer for Orc Group and has worked for the company since 2000.
He is the third CEO of the company in 18 months. Neonet founder Simon Nathanson left the company shortly after the merger to be replaced by Fredrik Lindqvist.