Profile | Paul Squires
“I think the extension of outsourcing of back office operations to a review of segregated trading desks is something that might emerge.”
Do you think there will be more consolidation on the exchange and MTF front? The proposed merger between ICE and NYSE Euronext is interesting because it proves exchanges are not profit generators in their own right but need technology, clearing, derivatives and data to make money. The merger between Chi-X and BATS also shows that they needed to diversify their own channels. However, some countries still seem to attach some nationalistic ‘prestige’ to owning their own primary exchanges which represents something of a constraint to consolidation and we also see other entrants launching new venues.
for execution and advisory services in the most effective way.
There is a trend toward multi-asset trading today, although I know AXA was one of the first. How has it developed? We introduced a new order management system (OMS) in 2005 from which all asset classes were executed. This enabled connectivity to be set up and provided us with an STP (straight through processing) solution for equities, fixed income and FX: using FIX either directly to brokers or to RFQ (request for quote) platforms. More recently we have integrated an execution management system (EMS) to enhance the functionality of a single platform for multi-asset trading. We started with equities, which upgraded our algo capabilities to offer greater granularity on how we are trading, which venues we are using, and are about to move FX onto our EMS, which has already enabled us to deliver enhanced execution performance analysis. This supplemented the benchmarking work that we had already been providing in fixed income using our proprietary tools.
Best Execution | Summer 2013
Looking ahead what opportunities do you see for your business? What we have done over the past four years has been partly strategic and partly in response to the market environment and changing client requirements. I do think there will be opportunities in the outsourcing of execution services as smaller to medium sized asset management firms may not have the resources to have dedicated traders and the infrastructure or expertise required to meet the accelerated regulatory changes. I think the extension of outsourcing of back
office operations to a review of segregated trading desks is something that might emerge. We have 31 traders across all asset classes including derivatives, have a technology platform which enables connectivity, performance analysis and bespoke client reporting and spare capacity to take advantage of such economies of scale. If the need for further investment in a trading capability becomes more of a barrier to entry for smaller asset managers then consolidation of such services could easily occur in buyside trading as it has done elsewhere. n
17
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