Named CollateralOne, the new platform expands the triparty offering for the buy-side by connecting clients to other aspects of BNY’s ecosystem, helping them centralise how they manage their collateral and financing activities, while providing the option of opportunistic specials-only lending.    

Speaking to The TRADE, Laide Majiyagbe, head of financing and liquidity at BNY, explained: “CollateralOne seamlessly delivers collateral, financing, and liquidity management to our clients in a single place. It is the outcome of our continued focus at BNY to be more for our clients. 

“In our pursuit of this, we actively seek new ways to bring more of our institution to clients and to deliver innovative solutions that meet their evolving needs.” 

BNY said CollateralOne provides clients with a holistic view of all their assets, liabilities and opportunities in one place.

Read more: BNY Mellon to provide outsourced trading solution to the buy-side 

Adam Vos, global head of Markets at BNY, explained that the move had come in response to client demand: “In today’s complex investment landscape, our clients are looking for comprehensive solutions that simplify securities lending, financing and collateral management. 

“With this integration, our buy-side clients can leverage the benefits of engaging in securities lending within a single ecosystem, grounded in BNY’s leadership in triparty collateral management.”   

The post BNY unveils new collateral offering for the buy-side appeared first on The TRADE.

Specifically, the update will allow for clearer definitions of rotation trade equity, credit, and duration in bonds as iFlow will be able to generate on-demand charts for shorts, holdings, and positioning.

“The new indicators are designed to provide transparency into unexpected market moves and show how markets have acted historically, helping to determine the potential vulnerabilities around shock events,” explained BNY. 

iFlow Shorts aggregates short interest metrics that log borrowing and lending behaviour, while iFlow Holdings demonstrates investor exposure to stock and bond markets. This includes a holistic view into how investors have allocated capital across factors such as country, sector, credit rating and maturity. 

iFlow Positioning measures investment preferences – comparing capital deployment across countries and sectors.

Read more: Fireside Friday with… BNY Mellon’s Geoffrey Yu 

Jason Vitale, head of global markets trading at BNY, said: “Finding ways to distil and understand market data continues to be one of the most important priorities for our clients. The challenge of today is no longer about getting access to vast market data sets but finding ways to unpack and generate those insights.

“Given our unique vantage point, touching around one fifth of the world’s investable assets, and through our expanded iFlow capabilities, we’re able to help clients better understand global markets.”

The post BNY bolsters iFlow’s fixed income and equities data appeared first on The TRADE.

As one of the most anticipated awards of the year, the recognition is designed to celebrate those individuals who have made a significant impact on their own organisation and, equally, the industry externally, with a commitment to bettering and future proofing the markets for years to come. 

Shortlisted individuals are repeated contributors to discussion whether that be through panels, associations or schemes to support the next generation joining the financial services industry. 

Last year, Goldman Sachs’ chief operating officer for EMEA equity execution services Eleanor Beasley took home the Industry Person of the Year Award in a landslide victory. 

The winner will be decided by a live industry vote at The TRADE’s Leaders in Trading gala awards night on 7 November at The Savoy. Congratulations to this year’s shortlisted nominees! 

Industry Person of the Year 2024 shortlist: 

James Baugh, managing director, head of European market structure, TD Cowen

James Baugh is an industry stalwart, having worked in the financial markets for over 25 years. Over the course of his career, Baugh has become renowned as a trusted partner to clients and for leading positive change in the European equities marketplace. He is an active participant in discussions on key topics impacting the industry. His team provides opinions and insights into shifting regulation and market structure, illustrating how these changes directly affect day-to-day business. 

Baugh currently serves as managing director, head of European market structure at TD Cowen; a position he has held since August 2021. Since joining the firm, Baugh has been a key driving force behind the growth of the firm’s European agency equities execution business. He has also helped shape the firm’s liquidity strategy by guiding clients through the complexities of European equity markets.  

Before joining TD Cowen, Baugh spent five years at Citi as European head of market structure. This followed 11 years at London Stock Exchange as head of equity sales, where he led initiatives like Turquoise Plato Block Discovery.  

A graduate of Newcastle University, Baugh began his career as a commodity analyst before taking on various roles at Dow Jones, including managing their European power index business. 

During the span of his career, Baugh has also represented several top financial organisations both across various industry forums including AFME, Q15 and Sustainable Trading, and on the board of Turquoise as a non-executive director.

Kate Finlayson, managing director, FICC market structure and liquidity strategy, JP Morgan

Kate Finlayson has considerable experience in financial markets, boasting a 25-year career that spans equities, fixed income, currencies and commodities.  

She currently serves as global head of FICC market structure and liquidity strategy at JP Morgan, having joined the firm in 2017. As part of her role, Finlayson has helped establish the FICC market structure function at JP Morgan, which she has developed into a global business with an extensive scope and reach.  

Before joining JP Morgan, Finlayson spent 14 years at UBS, holding a variety of senior positions including her most recent stint as head of market structure and liquidity strategy. Prior to UBS, Finlayson worked at Goldman Sachs in equity capital markets and prime brokerage.  

At JP Morgan, Finlayson engages with clients on the impact of market structural developments and drivers of change. Finlayson and her team also provide critical insights on emerging execution trends, microstructural dynamics and policy initiatives shaping liquidity across global markets. Widely considered to be a thought leader in the industry and a market structure expert, her insights are increasingly in demand. 

Alongside her role at JP Morgan, Finlayson is a trustee on the board of directors for JP Morgan Chase Pension Plan Trustee Limited. She also has external roles on industry advisory committees, including the UK FCA’s Secondary Markets Advisory Committee as well as the EMEA and US Quorum 15 Fixed Income advisory boards.

Bianca Gould, head of equities and fixed income EMEA, markets, BNY

Bianca Gould has extensive experience spanning 20 years in the industry, holding several senior roles throughout her tenure. She is particularly dedicated to supporting junior talent across the market.  

Currently, she is head of fixed income and equities EMEA within the BNY Global Markets Trading division and also sits on the executive committee for Pershing Limited. 

As part of her role, Gould is also responsible for expanding BNY’s execution footprint across EMEA.  A critical part of this strategy includes the recent launch of the firm’s new EU desk, based in Dublin Ireland. The aim is to deliver integrated execution serviced to its clients and facilitate more efficient trading for EU-based clients across both fixed income and equity markets globally.

Prior to joining BNY, she was the co-head of equities electronic sales and trading EMEA for RBC Capital Markets. Before that, she worked at Redburn for 15 years, having made partner in 2009 and remained the youngest partner appointed to date until the removal of the programme after her departure.   

In recent times, Gould has taken part in the Moonwalk initiative – walking a marathon during the night – to raise money for Breast Cancer, a charity close to her heart.

Stéphane Malrait, managing director and global head of market structure and innovation for financial markets, ING Bank

Stéphane Malrait is a market structure oracle. As a familiar face at some of the most important industry events, he works closely with advocacy groups, policy makers and regulators to make real change across financial markets.

Malrait works tirelessly to drive positive change in trading and market structure in the capital market space, understanding the important role of continued technological developments. At present he is working on the implementation of financial regulations that will impact the clients trading activity and transform how trading floors operate.  

Currently he serves as managing director and global head of market structure and innovation for financial markets at ING Bank, leading the financial market innovation strategies within the firm and contributing to industry working groups as a representative of the bank.

Before joining ING in 2015, Malrait spent eight years at Société Générale, most recently working as global head of FIC eCommerce. He also previously worked at JP Morgan Chase for ten years, serving in different roles in global FX eCommerce business management and cross-asset eCommerce technology, based in London and New York.

Since 2005, he has been an active member of the ACI Financial Market Association and is also a key part of the ECB FX contact group and a board member of ICMA.

Simon McQuoid-Mason, head of equity product and quant research, SIX Swiss Exchange

Simon McQuoid-Mason is a consistent thought leader across the trading landscape, continually unpacking the latest industry trends and sharing key insight on industry panels, important forums, and via insightful interviews.

McQuoid-Mason is currently head of equity product and quant research at SIX Swiss Exchange, having joined in 2020 as head of equity product for UK and Ireland. In his role, he is responsible for driving the evolution of SIX’s equity markets offering, including SwissAtMid and is also the lead author of SIX’s Trading InfoSnack series, a thought-provoking analytics series on market micro-structure and trading dynamics.   

He also serves as the current non-executive chair of the assets for the Te Aupōuri iwi, a Māori tribe from the far north of New Zealand, from who he descends. 

In addition, his past roles include stints at Bank of Queensland, the London Stock Exchange, Morgan Stanley and Emerge Capital Partners.   

A proponent of a pragmatic approach to the various trading areas, McQuoid-Mason consistently advocates for a rethink in terms of how key industry challenges are addressed, with a particular focus on ensuring policy makers and the wider public understand the benefits of thriving equity markets and overall reducing market complexity.

The post Leaders in Trading 2024: Industry Person of the Year shortlist revealed appeared first on The TRADE.

The desk is live and fully operational and specifically aimed at facilitating more efficient trading for EU-based clients across both fixed income and equity markets globally, focusing on streamlining the firm’s offering across different regional markets. 

Adam Vos

Adam Vos, global head of markets at BNY, explained: “Expanding into the EU is a direct response to the growing demand from our EU-based clients for execution services. The addition of our new team in Ireland enhances our ability to offer seamless and efficient services.

“We’re committed to strengthening our international offering of execution services and meeting the needs of our clients in the EU and beyond.”

The development enhances BNY’s operational ecosystem execution services offerings in Europe. Solutions include comprehensive execution to custody for BNY’s Markets, Pershing and Asset Servicing clients.

Bianca Gould, head of equities and fixed income EMEA, markets, at BNY is set to lead the execution services offering across the region. 

Read more: BNY Mellon names new head of fixed income and equities EMEA and head of US fixed income

Paul Kilcullen, country head of Ireland at BNY, explained: “Clients can execute equities and fixed income with enhanced support across time zones by BNY’s global team. This is a key milestone in our international growth strategy, which will have a positive impact on Ireland’s growing role as a key financial hub in Europe.”

The post BNY goes live with new trading desk in Dublin appeared first on The TRADE.

Achieving the same (or better) outcomes as trading inhouse is undeniably difficult. Buy-side heads of trading at this year’s TradeTech Europe conference explained that while of course “there will be cases for outsourcing” there are certain aspects of the trading process which are inherently convoluted and thus difficult to execute.

“Our trading group are viewed as part of the investment process with interaction and culture aligned. That’s difficult to replicate using outsourced trading,” asserted the senior panellists.

It is for this reason that only the most dedicated providers are set to reap success. Speaking to The TRADE, Dean Gray, head of EMEA outsourced trading at Jefferies, explains: “It has been well documented that the past few years have seen a significant shift in the mindset, especially of the larger funds, towards the adoption of outsourced trading. As larger funds utilise the service, other groups such as sovereign wealth and platform providers are becoming increasingly involved.

“These groups have an inherent nature of complexity that require outsourced trading providers to heavily invest in human capital and technology to meet all of their requirements effectively.”

Despite a degree of caution being exercised by the buy-side, the fact that around 40-45 firms across the industry identify as utilising outsourcing trading in some capacity, is telling. And the number is climbing.

In tandem, 50 providers are now dedicated to handling the gamut of trading needs. This is a significant reality, and a true sign that the industry is changing irrevocably.

As Rebecca Crowe, managing director and chief operating officer, BNY Markets, previously told The TRADE, “Years ago, it was the middle-office who were contemplating outsourcing and people couldn’t even consider that you would allow somebody into your books and records in that way.”

Broadly, the providers are independent firms, prime brokerages, and custodians, all with their own pros and cons, unique approaches, and distinct strategies.

The frontrunners across this space are clear to see. The next step for key industry players is now more important than ever as the gap between market leaders and ‘the rest’ seemingly widens.

Cost must be balanced with effectiveness

When it comes to outsourcing trading, seeking offerings with clear value-add and a smooth operational set-up has been front of mind for firms.

Brendan Burke, Brown Brothers Harriman’s (BBH) managing director and head of Americas FX sales and business development tells The TRADE: “Managers need to be comfortable that execution via an outsourced platform is comparable to managing the process in-house. It is important to be clear in terms of identifying activities that are in and out of scope to consider outsourcing.”

However, though execution quality is of course front of mind, the cost saving aspect is becoming an ever-more important consideration for the industry as participants are increasingly forced to juggle mounting regulatory, technological and data-related burdens.

Fees are mounting and when it comes to business strategy, this factor is demonstrably taking precedence – but at what ‘cost’?

Aaron Hantman, chief executive of Tourmaline, agrees that, despite the pursuit for quality, the decision to outsource – specifically where to outsource – often comes down to economics, explaining that in some cases this can have negative repercussions.

“If firms can receive front, middle and back-office solutions packaged as one and have to sacrifice the trading quality to get those economics they often do it,” he explains.

This can in many ways be put down to the decision to outsource generally coming from the c-suite and other senior leadership individuals – a controversial reality which many in the market have openly criticised for being an approach which omits important insight from trading teams.

“In terms of who makes that decision [to outsource] of course it is down to the people who are motivated by, and tasked with, looking at overall operating model transformation and cost efficiency – which are generally COO’s and CFO’s,” said Crowe.

She added that even when it comes to how decisions are being made as to the structure of outsourced offerings, capital considerations are commonly at the fore, specifically cost efficiency and more variability with costs.

Of course, this is an understandable reality, given the current state of the market, however, potentially sacrificing trading quality in the pursuit of capital saving is a high price to pay. Advice about cutting off noses to spite faces comes to mind, but as Hantman tells The TRADE, many times this situation arises not through any nefarious means, but because of a certain degree of naivety.

“People truly do not understand in many cases just how badly trading could be compromised,” he says. “Those who make wholesale changes without understanding the impact at the trading level will soon have to reverse out of them a year or two later.”

As firms continue to place a growing degree of trust in these providers, this should theoretically work to foster effectivity.

“Like many managed services, a provider needs to have scale and be able to deliver a quality offering combining client service, technology and trading expertise. It can’t simply be shifting trading responsibility from a manager to the provider,” highlights Burke.

The buy-side agree and discussions at conferences across this calendar year have focused on the importance of alpha retention in this space.

As one TradeTech Europe buy-side panellist affirmed: “Understanding the clients and the markets you trade is essential. You need to think of the trading desk as the engine that drives the room. Those conversations around news flow and pricing are central. An active manager needs an active desk.”

However, the crux is that this is not so easily achieved by an outsourced trading provider. Across the outsourced trading space, the barrier to entry has historically been low, but the barrier to success arguably remains high.

As Gray explains, “as the industry has begun to mature, each offering is becoming more clearly defined. The reality is many are not prepared to make the significant investments required to maintain or grow their share of the market.” 

The important impact of changing market sentiment

Demonstrably, things are ramping up and outsourced trading providers are highly cognisant of the importance of keeping up with the pack in this high-stakes game.

However, importantly, various sources speaking to The TRADE have confirmed that a shift of market sentiment has contributed to the development of this space. What started as a foot in the door, has widened into a significant entryway, with market participants – who were at one time not just hesitant, but hostile – now tuning into the importance of embracing change.

A recent LSEG and Coalition Greenwich report from Q4 2023 highlighted exactly this uptick in views around outsourced trading, wherein 66% of buy-side respondents confirmed their belief that outsourced desks could provide them with better access to liquidity, while 63% highlighted improved execution quality and trade performance.

The responses included views from 45 buy-side equities market participants across the US and Europe, of which 28% expect their firms to ‘at least consider’ adding an outsourced provider over the next two years. One respondent specifically commented that “outsourced providers act as an extension to the trading desk and understand our trading goals”.

Hantman tells The TRADE: “Between 2017-2019, especially in the UK and Europe, there was a lot of pressure for traders to justify their worth, especially considering things like Mifid II unbundling. At that time, the last thing that a trader wanted to hear about was the wonderful attributes of outsourcing.

“If you look at the last couple years there has been an evolutionary rate of acceptance which has accelerated recently. It suggests that the concept of outsourcing or supplemental trading has become institutionalised.”

Traders, and portfolio managers, across the industry are seemingly eager to be part of these conversations – not just about the dawn of outsourcing but also when it comes to technological change across the market.

When it comes to those truly at the coalface of the trading processes, overlooking their acumen should be done at a firm’s own peril.

“We as an outsourced trading community are always going to come up against the ‘fear factor’. However, by not being present in the set-up of a new regime [buy-side traders] are missing opportunity to have a say and effectively create even greater job security with a hybrid approach,” asserts Hantman.

Across firms, senior executives appear to be increasingly taking this on board, attempting to find the perfect balance between saving costs and weighing the true, long-lasting impact of making those big moves.

The market is moving, keep up

Against the backdrop of the growth of the outsourced trading industry, the landscape is set to continue its evolution in marked ways.

Gray predicts two key developments, which are now beginning to emerge: “That growth would lead to new entrants and to more consolidation amongst providers. This would result in polarisation, with a few key players and a larger number of smaller specialists leading the growth.”

Recent times have seen swathes of bigger and bigger firms turning to outsourcing in one way or another, however The TRADE understands that some of the largest firms have been embracing this strategy for quite some time and big moves have already transpired.

Examples just from the last six months include UK-based investment management firm Waverton – which has £9.1 billion AUM – outsourcing some of its trading to Northern Trust Integrated Trading Solutions (ITS), Nordea outsourcing the portfolio management of its emerging market bond funds to Metlife Investment Management, Singapore-based investment manager New Silk Road outsourcing its trading to Northern Trust, and most recently Stifel and Marex unveiling a new outsourced trading partnership under a broker referral scheme.

From Tourmaline’s perspective, Hantman asserts that the firm has been trading for multiple trillion plus asset managers for years, though these are unwilling to be named publicly.

Similarly, Crowe confirmed to The TRADE earlier this year that BNY “absolutely” has large scale clients on its books already. BNY announced a partnership with Goldman Sachs Asset Management in March concerning global trade execution services in EMEA, the US and APAC markets across fixed income, FX, derivatives and ETFs.

Speaking to The TRADE about the FX space specifically, Burke shares that BBH has also seen continued interest from larger managers who have FX resources and technology in-house.

“Many of these mangers are multi-asset class who may manage FX related to fixed income in-house, then lean on a provider to solve for equity related FX, coverage of restricted markets, or for rules-based share class and portfolio hedging programs,” explains Burke.

In The TRADE’s inaugural Outsourced Trading survey, it was discovered that around 72% of clients had less than $5 billion in assets under management, 15% had between $5-10 million, 8% were in the $10-50 billion category while 2.5% were in $50-100 billion and another 2.5% in the $100 billion-plus range.

While historically, this has very much been a space taken up by smaller funds – some large funds are demonstrably turning, or have turned, to these solutions. So, with ever-larger players making real moves in the space, what’s next on the agenda?

“Many articles have reported that better execution and cost-effectiveness are the principal motivations behind outsourcing, but we have noted the ability to cover multiple regions and asset classes are just as important,” Gray tells The TRADE.

Looking ahead, he shares that he foresees the next phase to be towards key players investing significantly in their offerings, providing services in a wider range of asset class coverage, such as fixed income, and also, importantly, emphasises the potential for further consolidation in the market.

Speaking from the Jefferies viewpoint, he shares that “from a technology standpoint, the ability to not only access but develop your own proprietary trading software will continue to be important.”

In the same vein as Gray, Crowe also highlighted a trend of expansion into further asset classes, away from just equities: “Fixed income is probably the next most logical volume traded asset class in the market […] but there’s also a lot of further interest in derivatives and other instruments.”

In terms of consolidation, the market has seen a range of key moves in recent times as firms seek to further deepen relationships and widen their reach.

Earlier this year, State Street acquired CF Global, a significant development in the outsourced trading world, which allowed the firm to considerably expand its geographic reach. Just prior to this, commodities specialist Marex completed its acquisition of TD Cowen’s outsourced trading and prime brokerage business.

Both transactions, among others, could fairly be considered a net reduction in the community, however the synergistic approach has been widely hailed as the future as the industry continues to battle costs, keep up with increased global correlations, and maintain effective processes. The industry will therefore likely see consolidation continue. 

Evidently, the gap between the most successful players in the space and ‘everyone else’ is continuing to grow ever wider. As the market ramps up in terms of the size of key players, heavier expectations on providers, and the consistent battle to strike the best balance between costs and effective trading, outsourced trading strategies are set for continued and significant evolution. The future landscape looks set to be markedly different to what the market is seeing today.

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