Trading & Execution Industry News

FTT punishes firms for fixing balance sheets    < 2014-02-24 >

The proposed pan-European financialtransaction tax (FTT) will hurt businesses that are sorting out their balancesheets, said Javier Hernani, managing director of Spanish exchange operator BME Group. Speaking to journalists in London today,Hernani said the tax would be damaging to businesses that were reforming theirbalance sheets to reduce debt and increase equity and will ultimately hurt recovering economies in Europe. Last week, at a French-German summit inBrussels, German chancellor Angel

Industry goes live with FIX OTC client protocol    < 2014-02-27 >

The trading industry has begun implementinga FIX protocol designed to automate and standardise key buy-side clientinformation for OTC trades. FIX Trading Community, the standards bodyresponsible for maintaining and developing the FIX protocol, said the TradingEnablement Standardisation Initiative (TESI) will reduce operation risk andmake it easier to set up new clients on OTC electronic trading platforms. TESI was launched in January 2013 with thegoal of standardising important client informa

CSA platform launches as FCA research consultation closes    < 2014-02-26 >

Aviva Investors has become the firstbuy-sider to sign-up for newly launched commission sharing agreement (CSA)management service Commcise. The move by Aviva comes as UK regulator theFinancial Services Authority (FCA) closes its consultation on the use ofdealing commissions to pay for research. Amrish Ganatra, partner at Commcise, saidthat the consultation paper has resulted in increased interest among both buy-and sell-side firms in ways to better manage CSAs. Commcise’s cloud-based platform

Compliance affecting trading systems, says Eze chief    < 2014-02-26 >

The need to meet greater compliancerequirements is causing a strain on the front office, including execution managementsystems and order management systems, according to David Quinlan,co-president of Eze Software Group. The need to route orders through complianceengines as investment ideas pass from the portfolio manager to the trader andthen to markets to execute is affecting latency and causing issues forconnections between disparate third-party systems, he said. “Thesurge of regulatory req

Big data key to big alpha    < 2014-03-04 >

The buy-side must harness ‘big data’ togenerate alpha in equities investing by identifying trends ahead of the market,presenters at the inaugural Alpha Innovation Required (AIR) summit concluded. The concept that belies big data – using vast sets ofinformation to distill actionable information – is not new to the buy-side, butthe extent to which asset managers can use disparate sets of data willincreasingly mark equities performance. Bill Stephenson, head of global trading strategy forFrankl

MTS adds to electronic offering with Bonds.com deal    < 2014-03-06 >

Fixed income trading platform MTS, owned by the London StockExchange Group (LSEG), will have access to hundreds of US clients afteragreeing to acquire US corporate bonds platform Bonds.com as it expands itselectronic fixed income trading offering. The agreement means MTS, which provides electronic tradingin European bonds, will have access to Bonds.com’s 600-strong US buy- and sell-sideclient base to trade both US and European products as fixed income continuesits transition toward greater ele

Buy-side market making in sights of algo developers    < 2014-03-05 >

Algorithm development is increasinglyfocused on providing a service that helps the buy-side to become liquidityproviders and adopt high-frequency trading (HFT) tactics. Last week, agency broker ITG launched itsSmart Limit Algorithm (SLimit) to help institutional investors trade passivelyacross multiple markets. The tool will enable asset managers tocompete with HFT firms to supply liquidity by using similar techniques seen intheir proprietary algorithms. Jeff Bacidore, head of algorithmic tr

FCA consultation speeds adoption of CSAs    < 2014-03-05 >

The UK regulator’s plans to reform the useof dealing commissions to pay for research and other non-execution services hasaccelerated the existing direction of travel of the UK asset management industry,according to experts. A Financial Conduct Authority (FCA)consultation on the use of dealing commissions, which closed last week, hascalled for greater transparency on payments by buy-side institutions for brokers’execution and research services. The regulator hopes to ensure that assetmanagers

Kellner elevated to Instinet chief    < 2014-03-07 >

Jonathan Kellner, head of Americas for Instinet, an agencybroker owned by Japanese investment bank Nomura, has taken the role of CEO. He willreplace Fumiki Kondo, who will run Nomura Asset Management’s overseas clientdivision. Nomura acquired Instinet in 2006 and since then the bank hasshifted its electronic equities execution services to the subsidiary for allregions except Japan. Kellner, who joined Nomura in 2003 and transitioned toInstinet in 2007, will be responsible for the firm’s globa

US buy-side trims broker list, says Barclays    < 2014-03-05 >

US institutional investors continue to reduce their brokerlists to focus on executing through a small number of bulge bracket firmsinstead of paying for research through execution commissions, according to BillWhite, head of equities electronic trading for Barclays. White said US buy-side clients were increasingly looking toimplement commission sharing agreements (CSAs) and move away from ‘soft dollars’– a term given to payments for research through execution commissions. “Due to thecompressi

Call for reduced large-in-scale threshold    < 2014-03-07 >

Requirements for large-in-scale waivers fordark trading should be reduced to help counter the potential impact of darkpool caps on block trading, according to panelists at the FIX EMEA Conferencein London. MiFID II is set to introduce severalrestrictions on trading in dark pools, including venue and Europe-wide caps andlimits to the use of the reference price waiver, which allows firms to avoidpre-trade price transparency under certain conditions.  The large-in-scale waiver also enablesfirms

ABN platform reveals ambitions to become “major force” in execution    < 2014-03-06 >

ABN Amro said the platform’s launch marks thestart of its push into the global execution and prime clearing business, sayingit has ambitions to become a major force in this market. ABN Amro Clearing has launched a newplatform offering multi-venue and asset class execution services. The platform, called AMG Global, offerstrading in equities and futures across Asia, the US and Europe through a singleFIX connection. It connects to a total of 41 differentequity and derivatives exchanges, with 2

The price of autonomy    < 2014-03-10 >

Dealing desks have significantly more power and control overtrading than in 2004, but the pursuit of best execution is not yet conducted ona level playing field. Surely the greateruse of technology has got to be the most significant change experienced by thebuy-side trader in the last decade? In the 10 years The TRADE has been chronicling the evolutionof equity trading from the perspective of the buy-side dealing desk, the growthof trade automation may be the most high profile trend, but pe

BNP Paribas to provide settlement for AQX    < 2014-03-17 >

Specialist execution services broker AQXSecurities has selected BNP Paribas Securities Services as it global centralsettlement provider. Hamburg-headquartered AQX is an agencybroker spun out from German asset manager Aquila, with a focus on execution andmulti-asset commission sharing agreement services. The deal with BNP Paribas will see itprovide central settlement for all trades executed on AQX Securities. Its service is underpinned by a tripartiteagreement, which will see client trades se

Are we there yet?    < 2014-03-17 >

Automationof buy-side trading processes has come a long way in a short time. Are wereaching the law of diminishing returns or are there new advances around thecorner? New tools and technology have undoubtedly changed trading andexecution for larger asset managers over the last decade, but what about thelong tail? You meanthe smaller or perhaps more traditional asset managers that haven't embracedalgorithms, smart-order routers and real-time transaction cost analysis etc. inthe last 10 years

SEC's Piwowar champions collaborative swaps approach    < 2014-03-11 >

Republican commissioner Michael Piwowar of the Securities and Exchange Commission (SEC) has called for greater cohesion among international regulators as the top US securities regulator prepares to unveil final swaps rules. Piwowar said the SEC would, in the coming months, release its final rule within Dodd-Frank’s Title VII that will cover securities-based OTC derivatives, taking into account industry comment on proposed rule issued last May. Piwowar criticised fellow US regulator the Commod

Report reveals “squeezed middle” among brokers    < 2014-03-13 >

Mid-sized brokers are struggling to makemoney as equity markets recover and reach a new normal, a report fromconsultancy GreySpark Partners has said. It claims the growth of trading volume andmore optimistic revenue projections, coupled with decreasing but better qualityliquidity have created a new set of market conditions that will favour somebroker business models over others. “Equity markets are at a turning point aslarge sell-side flow houses and prime brokers prosper again while boutique

High demand for venue audit trail in FIX    < 2014-03-11 >

Almost nine in ten buy-siders want FIXmessages to carry information about which venues their order has visited despitea lack of standardisation, according to a survey conducted by FIX TradingCommunity. The survey, led by co-chair of FIX’sbuy-side panel and senior quantitative trader at Alliance Bernstein, MichelePatron, will set out FIX’s agenda for developing its buy-side offering. One of the key FIX tags used by buy-sidetraders is Tag 30, which currently contains information on which venue

Liquidnet expands into bonds with Vega-Chi buy    < 2014-03-18 >

Institutional buy-side equities crossing network Liquidnetwill offer trading in corporate bonds after agreeing to acquire bond-tradingplatform Vega-Chi. The deal is the first of its kind for Liquidnet and comesafter years of speculation that the firm would move into bond trading from itsequities base, in line with buy-side demand. The London-based Vega-Chi platform facilitates trades in high-yieldand convertible bonds and, following its acquisition, would considerably extendits current 150 pa

ITG goes mobile with trading cost application    < 2014-03-19 >

Execution andresearch broker ITG has launched itsfirst cost index to help portfolio managers and traders understand tradingcosts on a daily basis.  ITG Trading Cost index provides daily transaction cost numbers acrossmultiple regions and nearly 100 categories. ITG has also launched its firstmobile application, Liquidity Metrics, which provides historical data over afive-year period, including average commission and price impact history.  “The availability via both a web and mobile application

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