TT’s Keith Todd brings fixed income and cybersecurity to FIA Boca 2023

FinanceFeeds Editor-in-Chief Nikolai Isayev spoke with Keith Todd about Trading Technologies’ move to fixed income after nearly 30 years of existence. TT is also proposing cooperation and transparency among competitors to tackle cyber risks.

The Futures Industry Association (FIA) welcomed the global derivatives industry to the 48th annual Boca International Derivatives Conference, held on 14-16 March in Boca Raton, Florida.

FIA Boca 2023 attracted more than 1,000 attendees, including 40 exchanges and trading venues as well as regulators, brokerages, trading firms and solutions providers looking to take the pulse of the industry as trading volumes in global exchange-traded derivatives rose by 34%, printing a new record for the 4th consecutive year.

Among the attendees was Keith Todd, CEO of Trading Technologies (TT), a global capital markets technology platform provider for banks, brokers, money managers, hedge funds, proprietary traders, Commodity Trading Advisors (CTAs), commercial hedgers and risk managers. Its flagship product, the TT platform, connects to the world’s major international exchanges and liquidity venues in listed derivatives alongside a growing number of asset classes, including fixed income and cryptocurrencies – delivering advanced tools for trade execution and order management, market data solutions, analytics, trade surveillance, risk management and infrastructure services.

Trading Technologies has been experiencing a “massive momentum” since it was acquired by 7RIDGE, founded by Carsten Kengeter, former CEO of UBS and Deutsche Boerse. Keith Todd joined as CEO at that time. The tech industry veteran’s career speaks for itself, but it should be noted he is a CBE (Commander of the Order of the British Empire) for his role in driving the Broadband agenda in the UK.

TT enters fixed income after decades in listed derivatives

With new ownership, new leadership, and a new macro environment, the stars have aligned for TT, a re-energized company that has been making a series of acquisitions, most recently taking over AxeTrading, a London-based provider of fixed income trading solutions.

AxeTrading provides market participants including banks, broker-dealers and buy-side firms with connectivity to more than 50 fixed income trading venues across corporate bonds, government bonds, munis and interest rate swaps. The fixed income market is rapidly moving away from a voice intermediated market to adoption of electronic trading. AxeTrading has been at the forefront of this evolution for more than 10 years, meeting the challenges of market participants who need tools to automate the pricing, trading and regulatory reporting of often illiquid securities, across multiple trading venues, in a market that is still largely driven by requests for quote (RFQs) rather than a central limit order book (CLOB).

“A significant moment”, Keith Todd told FinanceFeeds Editor-in-Chief Nikolai Isayev. “Next year is our 30th anniversary, but this is the first time TT moves materially to a new asset class: fixed income – corporate bonds, municipal bonds, Treasuries (we’re already in the Treasury market)”. Bringing about 30 customers largely from Europe and APAC to TT, Keith Todd praised AxeTrading’s foothold and product features and functionality, and highlighted that the priority for TT was to enter the fixed income markets.

The world of fixed income is quote driven, relying on RFQs, which need a different type of sophisticated software, particularly to help price illiquid corporate bonds, and AxeTrading brings that to the TT platform, Keith Todd said.

TT keeps expanding network of partners

Speaking of RFQ and fixed income, Keith Todd also mentioned the recently announced partnership with Deutsche Börse’s derivatives-focused exchange, Eurex, to facilitate access to Eurex EnLight, the selective RFQ platform. The integrated solution is expected to be made available on the TT platform by the end of 2023 for all equity, equity index and fixed income options and corresponding futures traded on Eurex as well as for all FX derivatives.

The TT platform now has its own OMS and EMS functionality. As a SaaS platform, it can also bring other partners’ products onto it. “Eurex is an exchange that sees the value of our distribution, our network. They can provide their functionality to a much wider audience […]”

Keith Todd, CEO, of Trading Technologies

Todd also spoke of the firm’s strategic partnership with ATEO Finance which enhances TT’s OMS offering. “It’s certainly leading edge, the combination of the two companies”, he continued, noting that by partnering with ATEO on its post-trade allocation functionality, “we accelerated time-to-market probably by 18 months to have a comprehensive offering for our OMS: classic features, the ability to take the very sophisticated allocation modules that large banks have and apply them out of the box. We integrated it in just 3 months.”

With today’s inflation, volatility, and record volumes, Todd expects the features the platform is providing from EnLight and ATEO to help drive volumes across the TT platform, benefiting Trading Technologies and its partners. Other partners recently brought to the TT network include KRM22 (risk management) and Bantix (for its QuikStrike options analytics).

Regulatory risk still dominates

About the macro picture, “I don’t think anybody should be sitting here and firmly predict what’s going to happen in the future”, he said, reiterating that the last 18 months are proof that the future is unpredictable and risk must be managed from more than one angle, including cybersecurity, the whole liquidity flow, and the consequential contagion of the crypto crisis.

“Risk is not one thing. Regulatory risk still stands for all firms. It will always be there”, Keith Todd added, as he looked back on a previous conversation about regulatory risk resulting in firms spending billions on penalties, compared to cyber risk which has allegedly cost a dramatically smaller number, though it is still a “serious risk”.

“From a macro side, everybody should be really looking at risk through the enterprise risk view”, a holistic perspective about the challenges in the marketplace and the way firms deliver their services. “From that perspective, we’re resilient to it. Not a significant amount of our revenues depend on volume. The most important thing we have to make sure of is capacity planning for very large growth.”

TT reached out to competitors and stakeholders to build a cyber circle

About the ION Markets cyber incident and the industry response to it, TT is taking a leading role by reaching out to competitors and venues to foster an information-sharing protocol.

“Our position is that what happened was an attack on the industry. None of the competitors I spoke to wants cyber risk to be a competitive advantage for one over the other, so we’re working on how to cooperate as well with venues to help ensure we create a cyber circle around the industry to give greater protection, faster flow of information in real-time when an unusual visibility of threats has occurred: types of attack, where they come from, etc.”, said Todd, noting that such incidents happen every day. “By finding patterns and disseminating information very rapidly among a limited community, TT is looking to work with competitors and venues to improve transparency between us. We’re all united on this.”

“It’s not just one event. It happens continuously”. It is an “important initiative” to ensure the infrastructure remains healthy, robust, and secure for everybody.”

Financefeeds.com