SaaS-based provider of buy- and sell-side trading solutions LiquidityBook has announced the appointment of Ryan Canfield as Lead Product Analyst.
Ryan Canfield also commented on the appointment:
SaaS-based provider of buy- and sell-side trading solutions LiquidityBook has announced the appointment of Ryan Canfield as Lead Product Analyst.
Ryan Canfield also commented on the appointment:
London-based global financial market intermediary for the buy side clients and, DeepWell Liquidity Management has announced appointments of seven senior market professionals to its team across three continent as the agency broker eyes further growth and expansion into different asset class.
Deepwell Liquidity Management launched in September 2017, by Richard Leighton is part of Traditional family if companies offers global coverage across a range of OTC and exchange traded FX products that includes spot, forwards, options and futures. The broker currently employs 15 staff members across Europe, Americas and Asia Pacific and the new hires will be based in London, New York, Singapore and Sydney. The seven new hires are as follows:
Alex Finney has been appointed as global head of its FX business and will be based in London. Mr Fineey has three decades of experience in Fx markets and has help various senior level management roles and sales at Credit Suisse. Finney was also worked as portfolio manager at Brevan Howard.
Next is Ajay Patel, who will focus on macro hedge funds and previously was a partner and macro fund portfolio manager at Blacksquare Capital. He has also worked with some of the leading global banks including Morgan Stanley, Deutsche Bank and RBS.
Tom Thatcher, former business manager from RBS, will also be based out in London office. During his tenure in RBS, he was responsible for product development and on boarding Fx prime brokerage clients.
Kieren McCormack has been appointed as Head of Origination. He had spent almost 20 years at Credit Suisse as Managing Director & Head of Prime Services Sales and Coverage. He also led an independent brokerage serving the institutional and hedge fund space.
Colin George has been hired to set up the company’s operation in New York. Colin had worked with BNP Paribas, Merrill Lynch and Calyon. He joins DeepWell from Standard Chartered Bank in New York where he held a senior institutional sales role.
Rodney Sherrard has been hired to set up DeepWell’s Asian Fx business and will be based out in Singapore. He has over 20 years of experience in trading fx and bullion derivatives at banks including Citi and Deutsche Bank. He will be assisted by Matt Yell, who has over 27 years of experience in trading and sales roles and was recently working with UBS. He will focus on the company’s macro hedge funds operations and will be based out in Sydney.
Richard Leighton, CEO of DeepWell Liquidity Management, commenting on the appointments:
“Since we launched, we have experienced significant global demand for our services from institutional investors. We are entering a period of extensive market evolution, with regulation such as MiFID II bedding in, a revamping of Dodd-Frank taking place in the US, and principles-based rules such as the FX Global Code all having a profound impact on trading and market behaviour. Our team brings extensive sell-side and buy-side knowledge, making us ideally placed to help our clients support their trading requirements.”
“Although we are currently focused on the FX market, we now have the expertise and resources in place that will enable us to grow our client base and serve institutions and investors operating in other markets, with particular focus on fixed income products.”
Multi-asset trading technology and execution services provider Dash Financial Technologies has announced the appointment of Glenn Lesko as Chief Growth Officer to drive the firm’s revenue growth objectives globally, both organically and inorganically.
Reporting directly to Chief Executive Officer Peter Maragos, Lesko is the latest executive hire made by the company. Equity trading industry veteran Jamie Bogen was appointed Managing Director of Execution Services in April. Dash Financial announced a management-led buyout backed by private equity investor FlexPoint Ford in March 2018.
A chartered financial analyst (CFA) and an industry veteran with 30 years of experience, Glenn Lesko is the Chief Executive Officer and President of Bloomberg Tradebook.
Lesko’s career was mostly spent working to deliver global, multi-asset trading solutions to the buy side. Prior to Bloomberg Tradebook, he spent nearly 10 years at Instinet, where he was CEO of Instinet Asia and later head of Americas Equities. He was also Partner at outsourced trading firm CF Global and Managing Director of Deutsche Bank’s international trading desk. Prior to that, he was Managing Director at ABN AMRO, where he first led the Asian trading desk in Hong Kong and later the international trading desk in New York.
Peter Maragos, CEO of Dash Financial Technologies, commented:
“Over the course of his career, Glenn has driven results through a leadership approach that encourages entrepreneurialism, instills a client-centric mindset and ultimately leads to sustained operational excellence. We’re extremely excited to welcome him to the firm.”
Glenn Lesko, Chief Growth Officer of Dash Financial, said:
“Dash is not encumbered by the restraints that many other firms face. We are a conflict-free technology firm that is 100% focused on delivering solutions to our customers. We have no goal other than to help our clients obtain the best possible performance. Period.”
Dash Financial executes approximately 14% of OCC volume, while its compliance workflow and technology solutions touch an additional 20% of OCC volume.
At last month’s SIFMA Equity Market Structure conference, executives with the following three startups and one established exchange discussed their particular market innovations and how each one fits into the existing equity market structure.
But each of these venues is entering a complicated marketplace. With 12 exchanges and more than 30 ATSs, any new entrant is facing hurdles of convincing buy-side and sell-side firms to connect to their venues to send order flow.
“Market impact is a problem that a significant segment of the market cares about across the board,” said Roman Ginis, founder and CEO of Imperative Execution, a startup based in Stamford, Conn., which is preparing to launch a dark pool known as Intelligent Cross in May. “The market makers care about this, the long-onlys care and the strategy funds care, even though they each have different holding periods,” said Ginis.
“Instead of looking for a silver bullet that solves the problem in the marketplace, we look at it as an optimization problem,” said Ginis, who has a PhD in computer science from the California Institute of Technology and is a former quantitative trader at Cubist Systematic Strategies, a business of Point72 Asset Management. Ginis said he spent many years designing algorithms for different strategies.
The startup is seeded by Steve Cohen’s Point 72 Ventures arm to combat slippage associated with certain high frequency trading strategies, as first reported in The Wall Street Journal in Steven Cohen Targets High-Frequency Trading with ‘Dark Pool’ Venture. However, Ginis said the problem is not specific to HFT and is much broader.
“The problem is we have a market great for small orders. The US market is deep and fast and highly liquid for retail. We don’t have an efficient market for those who want to trade a few thousand shares,” said Ginis. “This is why all the algorithmic desks exist,” he said. We built this platform to be additive to everyone’s algorithm that want to execute over time,” he said.
Unlike other ATSs, it will not work “parent” orders; instead, it will only see the “child orders” that are executed through algorithms, he said. About 80% of the market is algorithms working orders in the market.
Intelligent Cross will run a midpoint cross whose objective is to get the market impact immediately after the print as close to zero as possible, said Ginis.
What sets the dark pool apart from other rivals is that it uses machine learning to optimize its matching engine’s decision of when to trade based on the liquidity of each stock.
Rather than design a continuous trading system, Intelligent Cross is a venue that optimizes at discrete times. It will measure its own performance, learn from empirical data and “recalibrate” the match time for each stock, said Ginis.
As a near continuous match, it matches every couple of milliseconds, which is different for every stock based on its liquidity. To find the best time to trade, the ATS measures the market response typically 5-10 milliseconds after its own print. This is typical since algorithms also measure the book before and after, and know exactly how much slippage they received, said Ginis.
If there is too much market reaction that means somebody learned some information about the direction of the trade. In that case, the ATS would adjust the matching periods to make them further apart, explains Ginis. Instead of matching every 7 milliseconds, it can match every 3-10 milliseconds or 5-12 milliseconds. Then it can start shrinking the period between matches. “What the matching engine does is constantly find the optimal frequency in which to match such that it matches as often as possible, yet while the market response goes as close to zero as possible,” said Ginis. What you see coming out of the venue is a series of midpoint prints at randomized times, he said.
Other venues are also looking at reducing the frequency of trading to help institutions aggregate liquidity.
Nasdaq Stock Market has created the Midpoint Extended Life Order (M-ELO) “for participants for whom a millisecond or microsecond doesn’t matter,” said Chuck Mack, Deputy Head of US Equities, on the SIFMA panel. The dark order-type “is for participants or investors who are willing to be patient for just half-a-second and in return for that, anyone who wants to trade against them has to wait half a second,” he said. M-ELO orders will only execute against other M-ELO orders, which means they won’t be interacting with intermarket sweep orders (ISOs) or be subject to pinging, he said. “It was created in a simple way to protect participants as much as we can from adverse selection and market impact,” said Mack.
In the public markets, where many traders are representing 100 share orders to buy or sell, institutions are vulnerable to adverse selection and information leakage. “It can be frustrating to assemble a block,” said Jonathan Clark, CEO of Luminex Trading & Analytics, an ATS that is owned and operated by a consortium of buy-side institutions.
“Governance and ownership structure is what makes us unique,” said Clark. Launched in 2015, Luminex was founded by nine asset managers, including Fidelity Investments, to serve as a utility-like venue for buy-side institutions. The other investors include Bank of New York Mellon Corp., BlackRock, Capital Group Cos., Invesco, JP Morgan Asset Management, MFS Investment Management and State Street Global Advisors and T. Rowe Price.
“We aren’t catering to broker-dealers. They don’t have access to the platform,” said Clark, adding that asset managers must come in through their OMS or EMS, so it’s a closed environment.
The formation of the buy-side dark pool was a reaction to some of the scandals that occurred with dark pools, such as the blow-up of Pipeline Trading after it leaked information about institutional clients to its market-making arm. “That sort of stuff gives pause to the buy side,” said Clark, a former buy-side trader on a quantitative team at Merrill Lynch Investment Management, which was acquired by BlackRock in 2006. Clark became co-head of equity trading at BlackRock until he joined Luminex.
Though skeptics had claimed the venue would not get matches since buy-side firms are on the same side of the trade, Clark said the ATS has data to prove otherwise. With a minimize size of 5,000 shares, Clark said Luminex’s average execution size is 30,000 shares, and the average quantity submitted is 160,000 shares.
Based on FINRA data across all ATSs in the 10,000-share category, Luminex’s average trade size is 50,000 to 60,000 shares. Currently, Luminex has 180 subscribers in the market and feels that 200 will put it in good shape.
Despite the proliferation of order types in the market, Luminex is focused on the simplicity of block trading and only has two order types, said Clark. Cost is also a factor in Luminex’s growth. While some other block venues charge one to two cents per share, Luminex charges 25 mils (or .25 per 100 shares). He attributes some recent success to conditional orders where clients have an opportunity to rest an order in multiple places simultaneously. “Clients have an opportunity to rest with us and to rest with other venues,” he said. Through an OMS or EMS, they can check a box and expose a one-million share order to BIDS and Luminex, he said. “I can be in multiple places at the same time, and I can be patient,” said Clark.
By contrast to public exchanges that focus on high-speed trading, Long-Term Stock Exchange (LTSE) is in registration with the SEC to launch a stock exchange that allows listed companies to focus on long-term growth plans.
The exchange is looking to fight short-term thinking by creating new voting standards and disclosure rules which reward long-term shareholding. The idea was borne out of a book, The Lean Startup, in which author Eric Ries focused on how to help companies with innovation. Ries found out that startups and established companies are waiting longer to access the public markets. Ries proposes that startups will sell more shares to the public on LTSE because the rules will insulate them from short-term distractions and pressure from activist investors.
“As soon as companies enter the public marketplace they are facing quarterly scrutiny,” commented Michelle Greene, chief policy officer at LTSE. However, in the private marketplace, there was interest in how a company was executing on the long-term plan and growth, said Greene. Among the ideas is to provide disclosures that would give long-term investors more insight into what a company is planning for the long-term, and how they are measuring progress toward longer-term goals, said Greene, who is a former head of corporate responsibility at the New York Stock Exchange. Though it would be easier to register as an ATS, LTSE decided to register as an exchange. Greene said it would take the authority of an SRO [self regulatory organization] to make an ecosystem change. In addition, LTSE struck an arrangement in December of 2017 with IEX, whereby companies that list on LTSE can trade on the IEX platform. The partnership, known as “LTSE Listings on IEX,”will provide a specialized set of listing standards for companies looking to go public while making a commitment to long-term value creation, reported Bloomberg. Until LTSE is approved to be an exchange, companies can get an LTSE listing standard on IEX, whose exchange is aligned with the idea of protecting investors from short-term predatory strategies.
While US equity market structure is already complex, each ATS and exchange operator feels there is room in the market for innovation. Luminex’s Clark points out that when he was a buy-side trader, there were 50 dark pools operating, but some have closed their ATSs. “So now there are sub-40, and so there’s been some consolidation in that arena,” said Clark.
According to Imperative’s Ginis, “The number of venues doesn’t really matter as much since they are all connected to each other. “Everyone builds just one book,” he said. If he makes a decision to buy or sell stock and an order is routed via smart order router to Nasdaq or Arca, “it goes down one pipe to wherever I want to go.”
At the same time, major exchanges are floating the idea of launching more matching engines to differentiate their offerings. As reported, Cboe Global Markets suggested it would light up medallions to increase its revenues if the regulators impose price controls on access fees and rebates. Also, Intercontinental Exchange (ICE), the owner of the NYSE, is expected to bring its fourth exchange, NYSE National, live in May, and ICE also agreed to acquire the Chicago Stock Exchange for a reported $70 million, reported S&P Global Market Intelligence.
Alluding to this trend, Clark said, “I know that exchanges have been buying up different medallions. That’s innovation,” he said. “If you want to take a small venue and give it a go, Why not? “I think innovation is what’s driving the market structure today. I don’t think it’s broken.”
In a major push towards complying with latest MiFID II regulatory guidelines, six major global banks have announced that they have adopted the first fully-digitized MiFID II trade compliance engine for the financial markets. The groundbreaking regulatory compliance system from Droit Financial Technologies has launched in January ahead of MiFID II deadline.
The system helps financial institutes to comply with the complex and long regulatory reporting procedures described in the thousands of pages of MiFID II regulations. Goldman Sachs Asset Management has been the first buy-side client to go live with the reporting system. Other six global banks which has joined the list include BNP Paribas, CACIB, Goldman Sachs (both its broker/dealer and GSAM entities), and UBS.
The Droit’s compliance system provides the current and complete digitized machine-readable MiFID II rule text and machine executable implementation. This enables complete verification of every trading decision and also keeps a audit trail.
Transactional and regulatory compliance requires knowledge, maintenance and automation of complex global rule systems. The Droit’s Adept platform brings out full global cross-regulatory implications and obligations of a trade in real-time along with per-enquiry audit capabilities.
Jo Hannaford, MD, Technology Division, Goldman Sachs said:
“Droit’s ADEPT product is a central part of our eligibility architecture for MiFID II for both our broker/dealer and GSAM businesses, across a range of obligations. Droit’s innovative approach to the digitization of regulation and eligibility and the evolution of their ADEPT product fits well with our overall strategy,”
Cyril Cottu, Global Head of eCommerce and Digital, BNP Paribas Global Markets commented:
“Droit has successfully implemented an innovative and exciting platform which helps us strategically respond to industry and regulatory changes, like MiFID II, in the interest of better serving our clients. It is a core part of our digital strategy to work with leading providers like Droit to complement our in-house expertise to stay at the cutting edge of digital global markets.”
Simon Herbert, MiFID II Programme Lead at UBS Investment Bank said on Droit’s capabilities:
“The speed and ease with which we can implement new regulatory rule sets coupled with the flexibility of the core product integration mean Droit is well placed to be the strategic regulatory eligibility platform for the Investment bank.”
Satya Pemmaraju, CEO of Droit commented:
“Digitization is much more than an exercise in tagging data; it’s the complete analytic structuring of one of the financial markets’ largest ever pieces of legislation. Droit provides the full stack, starting with digitising the actual legal texts into an open, standard, machine-readable format through to standard executable implementations within real-time systems. As regulations live and breathe, so our clients’ implementations and legal sources evolve in synchronicity.”
Paul Charie, Global Head of Sales at Commcise commented: “We are excited to be adding to our team globally. Bringing a talent such as Melissa in to the organisation is an important part of our strategic plans for 2018.” He continued, “The North American market is very exciting for Commcise and with Melissa’s contacts and experience, we are very confident of continued client base expansion in the US and Canada this year.”