Viewpoint | Jon Knight
Keeping watch
Jon Knight, Head of Surveillance, Liquidnet Europe, talks to Best Execution about the importance of market surveillance in terms of creating and maintaining an efficient and orderly market.
What are your views on the regulatory changes striving to curb market abuse practices? Preventing market abuse is in the best interest of the whole financial market and its participants. Today regulators and investors are unwilling to tolerate market abuse of any kind. At Liquidnet, as a global trading network, we operate a robust surveillance system, Liquidity Watch, in order to protect our members – and it is a responsibility we take extremely seriously. That said, there will always be people looking for ways to manipulate the market and this is why regulatory efforts to curb market abuse practices, in consulation with market participants, are important. The message must be that if you commit market abuse be prepared to face the consequences, because you will get caught.
What are the current issues and trends that you are seeing?
As trading in the financial markets becomes faster 36
and arguably more complex, so does the task of market surveillance. For example, fragmentation of the European equity market means that market participants can trade the same stock on multiple venues. As a consequence, we monitor very closely for potential manipulation of bid/offer spreads and trade prices on the different venues along with other market distorting behaviours. This means that we survey activity on our own and other trading venues globally. Surveillance methods, at the very least, need to keep up with developments in trading technology and so at Liquidnet, we make ongoing investments in our monitoring tools with the aim of staying one step ahead.
What are the prime concerns for buyside institutions?
Buyside firms, like all investment firms, have a regulatory obligation to achieve best execution, which is often misconcieved as an obligation to get the lowest cost of execution. In truth, for the
Best Execution | Spring 2013
Page 1 |
Page 2 |
Page 3 |
Page 4 |
Page 5 |
Page 6 |
Page 7 |
Page 8 |
Page 9 |
Page 10 |
Page 11 |
Page 12 |
Page 13 |
Page 14 |
Page 15 |
Page 16 |
Page 17 |
Page 18 |
Page 19 |
Page 20 |
Page 21 |
Page 22 |
Page 23 |
Page 24 |
Page 25 |
Page 26 |
Page 27 |
Page 28 |
Page 29 |
Page 30 |
Page 31 |
Page 32 |
Page 33 |
Page 34 |
Page 35 |
Page 36 |
Page 37 |
Page 38 |
Page 39 |
Page 40 |
Page 41 |
Page 42 |
Page 43 |
Page 44 |
Page 45 |
Page 46 |
Page 47 |
Page 48 |
Page 49 |
Page 50 |
Page 51 |
Page 52 |
Page 53 |
Page 54 |
Page 55 |
Page 56 |
Page 57 |
Page 58 |
Page 59 |
Page 60 |
Page 61 |
Page 62 |
Page 63 |
Page 64 |
Page 65 |
Page 66 |
Page 67 |
Page 68 |
Page 69 |
Page 70 |
Page 71 |
Page 72 |
Page 73 |
Page 74 |
Page 75 |
Page 76 |
Page 77 |
Page 78 |
Page 79 |
Page 80 |
Page 81 |
Page 82 |
Page 83 |
Page 84 |
Page 85 |
Page 86 |
Page 87 |
Page 88 |
Page 89 |
Page 90 |
Page 91 |
Page 92 |
Page 93 |
Page 94 |
Page 95 |
Page 96 |
Page 97 |
Page 98 |
Page 99 |
Page 100