Profile | Frank Troise
“We must constantly keep up with the technology arms race and be as nimble as possible while at the same time tightly managing operational and market risk.” Frank Troise, global head of equities ECS at J.P. Morgan
and product architecture to enable clients to trade equities, options, futures, or any other instrument that trades on a public venue or an electronic bulletin board. We have made a big push with Neovest, our execution management system. Earlier this year we launched 15 new futures markets as part of a drive to build out the global platform. The new futures markets include Brazil, Dubai, Singapore, Sydney and Tokyo, bringing the total number of accessible futures markets on the platform to 29. Our electronic options platform has been up and running in the US for the past couple of years and we’ve recently added options algos to the offering.
There are many banks trying to do the same thing, what do you think are your main differentiators?
Liquidity has been and continues to be one of the most important priorities for our clients. An important factor in achieving best execution is having access to natural liquidity as early as possible in the trading process. We have created an internal pool of differentiated liquidity by consolidating various sources of order flow within J.P. Morgan.
For example, we source house liquidity from the private bank, clearing business, equity derivatives, transition management, as well as third party brokers. This is an ever evolving business and we seek to enhance our client service and product capabilities constantly. We have the scale and commitment to invest in client facing personnel and technology across the globe.
How has the role of the broker changed? Brokers have always and continue to be in the
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business of providing research, advice, calendar, and execution services. Clients have investment ideas that need to be implemented and brokers offer all of the full service products as well as multiple execution channels to meet their trading styles.
Clients can use the traditional high touch cash
programme channels in addition to having more control of the execution process at their fingertips via electronic execution products. With respect to electronic execution, brokers are now much more engaged in educating clients about market structure, trading venues, and counterparties. Additionally, brokers are more involved in assisting clients in trade planning and historical and real time execution quality analysis. Clients are looking for much more transparency and analytics tools to understand better the behaviour of electronic execution products. The more we understand clients’ goals and objectives the more effectively we can work with them on developing customised solutions.
Where do you see the greatest challenges? Combining rapidly advancing technology and regulatory changes results in a set of new execution methods and trading opportunities. Current market structure demands a significant investment in technology and risk management capabilities. We must constantly keep up with the technology arms race and be as nimble as possible while at the same time tightly managing operational and market risk. Although this is not an easy equation to optimise, we feel our scale and commitment to clients’ goals will lead to continued growth in this evolving space. ■
Best Execution | Autumn 2012
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