[ A D V E R T O R I A L ]
Fireside chat:
Embracing new
technologies
Simon Steward, head of European equity trading at Capital Group,
and Mark Pumfrey, head of Liquidnet EMEA, consider how market
participants can encourage an innovative and positive trading
environment in which they embrace next generation technology to
benefit their business, their clients’ experience, and the industry.
What are the buy-side’s key
challenges, post-MiFID II?
Simon Steward: As a large asset
manager, liquidity sourcing is par-
amount to what our trading desk
and execution platform needs to do
on a daily basis. The real challenge
for us is to ensure that we have a
robust and flexible toolkit to take
advantage of liquidity opportuni-
ties in the market. It’s also about
understanding the market micro-
structure in a very fragmented,
post-MiFID II world.
How are you addressing these
challenges?
SS: Technology is a major part of
our strategy. The biggest challenge
is identifying the ‘must haves’
against the ‘would be nice to
haves’. We have been working on
this over the last few years, taking
18 // TheTrade // Summer 2018
an in-house build, rather than buy
approach. And while we have not
engaged third-party vendors to en-
hance our trading platform in the
past, this is starting to change.
Data and analytics will be crucial.
We have a Market Transaction
Research Team, which has become
fundamental within the global
trading group. This team examines
all our data, not just at the trader-,
account- or fund-level, but also
providing us with venue analyt-
ics. This enables us to have more
enriched conversations with our
counterparties and venues around
routing practices and outcomes
moving forward.
By bringing this onto the trading
desk, we are looking to empower
traders and provide them with the
relevant information to validate
their decisions, in the overall
context of best execution and with
respect to MiFID II.
How does Liquidnet view the
market structure changes and
regulatory requirements?
Mark Pumfrey: Certain aspects
of the market have become more
complex and we have seen some
unintended consequences.
Since the introduction of double
volume caps, the systematic inter-
naliser (SI) regime has accelerated,
having almost doubled from where
broker crossing networks were and
there is a significant lack of trans-
parency around routing practices.
The average execution size also
remains relatively small, so I think