working with many different
vendors across all asset classes
in bringing what we think is a
best of breed tech solutions to
the trading environment. What
we’re trying to do is harmonise
the front- to back-end process,
incorporating as many elements
that will affect trading outcomes.
This brings into consideration
broker exposure, algorithms,
margin and liquidity analysis.
Traders have a lot more
information at their fingertips
which enhances our commitment to best execution. We have
seen great developments in this
space especially when incorporating FX and fixed income
products in the last 18 months.
How can your sell-side
partners improve their
We are constantly evaluating how we do our business,
particularly when it comes to
liquidity analysis. I have seen an
evolution in tools I was using 10
years ago in equities particularly
in basket trading and algorithms,
those products are now crossing over into FX, fixed income
cash markets. We would like to
see this to continue evolving.
When you couple the technology arms race that we are seeing
with being able to provide competitive pricing and liquidity,
especially when volatility picks
up, this will most likely see these
counterparties stand out. n
has become much more aware
how over collateral impacts and
how their counterparties offer
pricing and liquidity.
Mandatory clearing and the
uncleared margin requirements
is going to help asset managers
streamline their processes.
To what extent are back-
office decisions affecting
In today’s environment the
back-office and middle-office is
quite an old fashioned way of
looking at a trading operation.
A trading operation has to be
looked at as a harmonious unit
that incorporates our business
partners, that being back/mid-dle office functions, risk, compliance, and legal. To me they
are all part of the same function
and cannot operate without full
integration of the others.
It’s one of the benefits we
have seen since the financial
crisis in that each unit is now
much closer to business than it
used to be, and actually helps
get projects delivered much
faster. They all have to come
together in unison to provide
the highest level of service to
our portfolio managers and
ultimately our clients.
What new initiatives are
exciting you currently?
I have to admit to having an
unhealthy interest in trad-
ing platforms. We have been
dominate market share. I remain
to be convinced whether this is
possible in the derivative space.
It’s largely a balance sheet business, where the other side need to
be comfortable in offering liquidity on their books, sometimes
in exotic products, out to several years. This is not something
smaller houses or new entrants
will be able to copy easily.
With many banks
reducing their role in
the markets, do you see
more non-bank firms
filling the space?
It is only going to be the large
players with the big balance
sheet that can fill that role.
However, it is not just around
balance sheet, you have to have
the infrastructure to make markets in derivatives, even in the
listed/liquid/OTC space. That
requires a huge infrastructure
to support that trading.
How will the central
clearing mandate for
OTC derivatives affect
We currently already use electronic platforms for trading OTC
for our business, particularly in
the US which will help us migrate
when this comes fully into play
in Europe. What is evident is
that going forward the clearing
will become a bigger part of the
decision-making process when
executing a trade. The buy-side