Profile | Rob Crane & Mike Seigne
“The goal is to put the choice in our clients’ hands whilst being both skilled and technically able to deliver execution
excellence across the board.” Mike Seigne
Rob Crane: One of the most important benefits of non-displayed liquidity is that it can be a more cost effective way to execute an order. For example, if you are an institution with larger orders you may benefit from pre-trade protection which is best achieved by using non-displayed liquidity sources, either through an electronic channel or a traditional single stock desk. If this option is no longer available, the end client may experience a material reduction in execution quality.
Do you think that best execution has improved over the past six years since MiFID was launched? Rob Crane: Best execution is still a nebulous term, in so far as it is defined by the organisation that is doing the executing. It is all about having a policy and procedure. The more interesting question is whether the quality of execution has improved and I would say it has for a subset of orders in terms of the implicit trading costs falling. However, I think we still have a long way to go in post-trade efficiency regarding the clearing and settlement side of things.
Mike Seigne: Fragmentation is still challenging for institutional players. There may be more ways to trade – electronic, cash, programme trading, agency broker models etc – but orders placed with brokers to execute are typically smaller and it can be harder to find the other side. We try and help clients who are liquidity challenged by offering them more choice in how we can deliver our execution service.
Best Execution | Summer 2013
How do you think the debate about high frequency trading will evolve? Rob Crane: I’ve still yet to see an effective definition of what actually constitutes “HFT”. It can range from market making to quant trading to more aggressive arbitrage strategies, with various other flavours in between. What I think is most critical though is to ensure that at the venue level, all parties get equal treatment in terms of market data, functionality, special order types, etc.
What other trends are shaping the industry? Mike Seigne: We are seeing a move on the part of some of the more bespoke or regional broker dealers to outsource their execution infrastructure. For example, they are turning to us to provide them with a smart order router or a suite of algorithms. This is being driven in part by the increasing complexity and number of regulations, which makes it prohibitively expensive to build and maintain high quality execution. You also need to be flexible and able to react dynamically to changing market conditions and this requires significant and continuous investment. n
n Rob Crane is co-head of electronic trading for EMEA at Goldman Sachs. He also manages electronic trading and co-manages programme trading in Europe. He joined Goldman Sachs in 1999 as an associate and was named managing director in 2008. Prior to joining the firm, Crane worked at Ernst & Young and Nomura International. He earned a BSc in Chemistry from the University of East Anglia.
n Michael Seigne is co-head with Crane. In addition, he manages the European transition management business and has responsibility for the European futures sales team. Previously, Seigne co-managed the European programme trading business in London. He joined Goldman Sachs in 1994 as a foreign exchange trader in Hong Kong before moving to the equities division in 1996. He worked in Hong Kong and Australia as an equities sales trader until 2002 and was named managing director in 2007. Prior to joining the firm, Michael was a civil engineer in Hong Kong. Michael was educated in Ireland and England and earned a BA in Civil Engineering and Mathematics from Trinity College, Dublin.
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