Latest Blog Posts

ESMA stops short of a no-action letter

Anne Plested, Fidessa

Mar 30, 2015
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Having taken several years to get through the review of MiFID, it was interesting to hear from ESMA chair Steven Maijoor last week that there is an appetite to “explore the mechanisms to address regulatory adjustments in a flexible and agile manner”. Neither national authorities nor ESMA have any tool like the ‘no-action letter’ employed in the US. Given that the rules may not be completely finalised until a year (possibly less) before the MiFID II January 2017 go-live date there will be huge implementation challenges. read more

Left in the dark

Christian Voigt, Fidessa

Mar 26, 2015
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Currently, it doesn’t really matter whether dark trades are executed under the reference price waiver (RP), large in scale waiver (LIS) or a negotiated trade waiver (NT). However, under MiFID II, the waiver flavour will make a significant difference. Whilst RP and parts of NT will become subject to the clunky double volume cap, LIS will not, so we may expect to see an increase in block trading. But how does an exchange flag a trade that matches a LIS order with an RP order? Coming up with an appropriate approach is now a pressing issue. read more

From Revolution to Evolution in the Search for Liquidity and Alpha

Greg Ludvik, FlexTrade

Mar 24, 2015
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Smart Order Routing (SOR) has ebbed and flowed as a topic of interest in the financial industry.  Because the functionality has become commonplace in the market, its presence in institutional trading platforms has nearly become an afterthought.  But its necessity is without doubt, especially in light of the exponential growth of electronic trading, proliferation of order types and instructions, and fragmentation of liquidity. Revolution The launch of the first smart order router was a revolution in trading, allowing traders to access liquidity across multiple markets and get size done. read more

Change is the only constant

Anne Plested, Fidessa

Mar 19, 2015
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The unbundling of payment for research is a top concern for the industry. There seems to be general acceptance that, one way or another, Europe is set on the soft dollar research market becoming a hard dollar one by January 2017. Despite calls for more clarity and the recent publication of the FCA discussion paper on the regime, opinion remains divided as to how the use of CSAs can evolve to survive as a payment mechanism. There’s no denying widespread change is already underway, in roughly the same direction of travel as MiFID II. read more

Quants, Compliance and the Buy-Side OMS

FlexTrade

Mar 16, 2015
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  OMS Challenges for the Buy-Side As hedge funds turn to a more active, quant-style of trading, they often need to run pre-trade compliance checks on hundreds if not thousands of names within seconds. But what happens if an OMS is not built to keep up with the rapid pace of executions and compliance checks?  There’s no doubt that the move toward quant trading has raised the stakes for buy-side OMSs that serve hedge fund clients executing baskets with thousands of names. Some OMSs easily handle big blocks of 100 trades, but they may stumble over executing a large portfolio of names. read more

As ETFs Heat Up, Liquidity Remains the Elephant in the Room

Mike Baradas, Kapil Phadnis & Gary Stone

Mar 12, 2015
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The institutional investor’s thirst for information and quantitative studies on ETFs has been insatiable. Tradebook has participated in three conferences already this year: Inside ETFs at the end of January and most recently, Bloomberg’s Equity EQ’15 Forum and Institutional Investor’s Trader Forum Winter 2015 NYC meeting. Our topic at those conferences dealt with ETF Liquidity: The Elephant in the Room Click here for our detailed session notes from the Trader Forum discussion. In all three meetings we hosted educational seminars, addressing three issues: • Growing institutional usage • Liquidity access • ETF execution Gary Stone, Chief Strategy Officer, discussed ETF market structure, trends and usage while Mike Baradas, the Product Manager for Cross Asset Strategies and ETF Liquidity Solutions, and Kapil Phadnis, Tradebook’s Global Head of Quantitative Research, discussed Liquidity and Execution. read more

Holding a steady course

Christian Voigt, Fidessa

Mar 12, 2015
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Having spent the last three months buried under a deluge of MiFID II consultation pages, the real world looked quite different when I came up for air recently. Since ESMA published the consultation back in December, Greece has elected a new prime minister, Star Trek has sadly lost the original Mr Spock, Madonna fell off a stage and a whole new season of House of Cards is available on Netflix. The reading forecast for the next couple of weeks looks relatively calm, though, with only a few documents to digest. read more

Shifting Sands – the harsh realities of executing in today’s markets

Will Winzor-Saile, Fidessa

Mar 10, 2015
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The electronic execution landscape has undergone a slow but steady transformation over the past decade. Increasingly seen as a commodity, execution infrastructure provides essential functionality without which it would be impossible to operate, but few brokers see it as a means of gaining any real advantage over their rivals. Today’s differentiators are found higher up the chain; sophisticated algos, execution consulting capabilities and other innovations that sit on top of the execution infrastructure. read more