[ A L G O R I T H M I C
T R A D I N G
S U R V E Y ]
Brokers leading
next generation
of algo trading
The 2019 algorithmic trading survey finds that brokers are stepping up to the
plate in the post-MIFID II landscape to provide consistent execution to long-only
buy-side firms that are more knowledgeable and discerning than ever before.
L
ast year’s algo trading survey,
conducted in the early stages
of the new MiFID II regulatory
regime, found that algo providers
were coping well with the more
critical approach of buy-side firms
amid a heavy period of regulatory
upheaval. As end users become
more comfortable and knowl-
their game, both in response to
new obligations under MiFID II
and the exact requirements laid out
by their buy-side clients.
Overall, the average score from
long-only respondents for the sur-
vey this year was 5.74 - a noticeable
increase on the average score of
5.60 in last year and a return to the
“The performance scores for algo providers in this
year’s survey shows that brokers and other algo
providers have begun stepping up their game.”
edgeable about the algorithms
they are using, and indeed in some
cases placing at the centre of their
trading strategies, brokers and
banks must stay ahead of the pace
of change and provide consistent
results to their clients.
The performance scores for algo
providers in this year’s survey
shows that brokers and other algo
providers have begun stepping up
72 // TheTrade // Spring 2019
levels seen in 2017’s survey prior
to the introduction of MiFID II.
As seen in Figure 1, this trend is
evident across almost all of the
functional categories under review,
with all but one category showing
year-on-year improvement, with
many areas of performance again
reaching, or exceeding, the 2017
results. This could be attributed
to a less critical approach from
buy-side algo users, however it is
far more likely that algo providers
have successfully adapted their
offering and approach to the new
trading landscape.
The highest score achieved in this
year’s survey was in the customer
support category with 5.95, while
there were high scores in the im-
proving trader productivity, speed,
anonymity, and ease of use catego-
ries. The areas of performance that
showed the greatest improvement
year-on-year were in improving
trader performance (up 0.29 from
2018), speed (up 0.31 from 2018),
cost (up 0.23 from 2018) and price
improvement (up 0.21 from 2018).
The two new performance catego-
ries introduced in this year’s survey
showed respectable scores – 5.68
for data on venue/order routing
logic or analysis and 5.58 for algo
monitoring capabilities.
Dark pool access was also predict-
ed to be an important factor for buy-
side firms over the course of the last