[ A D V E R T O R I A L ] world of information overload, the ability to crunch this data by exception and deliver actionable insights in a visual manner straight to the buyside trader’s desktop will provide asset managers and port- folio managers with a whole new level of empowerment. The evolution of technology is being driven by buy-side demand post-MiFID II; how can you antici- pate their requirements? MP: We have a clear perspective on the marketplace, enriched by a deep understanding of our mem- bers, their workflows, and what they need. In our Liquidnet Labs we constantly evaluate innova- tions that may be relevant to them, assess the opportunity globally and prioritise roll-out based on rele- vance and member feedback. SS: Post-MiFID II, there is no one-size-fits-all; you can’t have one generic fix which suits every asset manager. It’s up to us, on the buy-side, to identify issues and go to trusted vendors we can work with, given the complexity of our internal infrastructure and the flexibility we require from our partners. How do you see the challenges and opportunities over the next 18-24 months? SS: I believe that the current European market structure isn’t anywhere near what a post MiFID II world is going to look like from an execution standpoint. There are still many moving parts which are going to materialise over time in- cluding the growth of new venues and platforms and the evolution of the SI regime. We just need to en- sure we understand it and feed that information and decision-making into our investment group, to continue to execute in an efficient 20 // TheTrade // Summer 2018 manner. Analytics is critical towards meeting MiFID II transparency requirements. We’re starting to get good sized data sources which are feeding into our overall process and enrich our counterparty con- versations. I expect to see a further evolution of this journey over the next 12-18 months. MP: Regulation will be the driving force, but it is then down to indus- try participants to create a better market structure by introducing “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.” competition, focusing on best prac- tices and looking at where value exists. Whether you’re a FinTech or a traditional business, you have to be able to improve the efficiency of the marketplace for everyone’s benefit, but specifically the end investors and pension funds. How will technology evolve to sup- port buy-side trading desks? SS: Despite words like ‘artificial intelligence’ (AI) and ‘machine learning’ being bandied around in our industry we are not looking to replace traders with machines. Far more importantly, we want to use technology to enhance our traders’ capacity and take these concepts and consider how they can be added to our workflow, our trading desk and our group. Embedding these into your workflow is always the biggest challenge. MP: AI is a definite buzzword for the industry at the moment. Liquidnet is using artificial intel- ligence within our Virtual High Touch suite to help distil vast amounts of data into actionable insight tailored to every order on a trader’s blotter. But in a MiFID II world, it comes back to en- abling the trading desk to position themselves as a major alpha centre within the organisation. This has always been Liquidnet’s position. We are providing tools to make that happen; to make the alpha collection process of the PM more efficient, which ultimately results in better performance. Change is primarily being driven by regulatory initiatives; would these changes have occurred without regulatory intervention? SS: The move towards greater transparency and reliance on data to enrich and validate our deci- sion-making would have happened without MiFID II. We were already on that path because we already viewed trading as a key part to our investment process and an area where value can be both added and preserved. But MiFID II has accel- erated the process, certainly from a European perspective. MP: Certain aspects that are healthy for the industry - such as unbundling and the separation of research and execution - would not have happened without regulation. MiFID II is accelerating a chain of events which has global conse- quences, not so much with the regulators in other jurisdictions, but the end investors – trustees and pension funds. Because at the heart of it, that’s what MiFID II is driving towards: best-practice investment services to benefit insti- tutional investors and their end clients – our parents, grandparents, children, and indeed ourselves.