The TRADE 56 - Page 19

[ A D V E R T O R I A L ] the regulator will be looking at this in the future. As expected, we have seen a reduction in the dark MTF market, which today only represents between 5-6% of daily order book notional, versus an average of 10% pre-MiFID II. Whilst dark volumes have fallen, the proportion traded LIS has increased to around 50% of dark trading, to meet the needs of institutions such as Capital Group who want to trade large positions. Another big development has been the growth of periodic auctions, which are running at anywhere between 2-3%; questions are emerging around broker-pref- erencing, which the regulator is clearly examining. The other aspect of MiFID II is, of course, that it is driving global standards and practices when it comes to unbundling and best ex- ecution, as firms around the world adjust how they conduct business. Mark Pumfrey, head of EMEA, Liquidnet Is MiFID II an opportunity from a global trading perspective? SS: Very much so. MiFID II has brought best execution to the forefront, in particular how we approach the market, the data, and analytics that are part of the process. We see a lot of similarities across markets, despite market structures in Europe, US, and Asia being so different. Our analytics team has started to embed those similari- ties throughout our trading and thought-processes across the group. group. It comes back to pre-, in-, and post-trade decision-making. The more integrated your trading group is around why the decision has been made to buy or sell a stock, the more effective the strat- egy discussion and the stronger the relationship with the PM. Equally, it’s not just about extracting value when you’ve got orders on the desk, it’s also about finding liquidity when you don’t. The work that Liquidnet has done around Targeted Invitations gives us the ability to shop for stocks that are not live now, but in which we may have been active over the previous weeks or may look to be active in the near future. Embed- ding these capabilities into the investment process makes our traders far more effective. How are you looking at empower- ing trader decision-making in the context of MiFID II? SS: The role of the trader has changed drastically in terms of the interaction with the portfolio manager (PM) and our investment How does Liquidnet view the evolution of technology alongside working with asset managers such as Capital Group? MP: MiFID II gives trading desks the opportunity to become even more central in their organisation. Whereas it forces trading desks to take more control, to be more em- powered, it also places a lot more responsibility for best execution upon them. There is a huge requirement for the liquidity landscape to be well understood and accessed efficient- ly, and for information to flow from trading desks back into the market and up to the PM. It’s essentially the ability to get into the PM’s head and to source new liquidity. Technology is required to get to this stage. We are focused on working with our members to ensure HH][\BYH[][[H[[[H[\]ZY]HXY[BHH\\]H[YY[YX\] H\H[^\[ݘ][š[\\XH H\]Y[]][ۜ˜[\H\\HZ[[]][BX[^[\\][\\X[YXZ]HوY[˂[\ۙH\\X]Z\][ۂ\YX\وY[[[]X\KT[HܚH]HۙB[\[[Y[[[]XHY\&\\ [B\YH M UYS]˘H N