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.

Currently, the cause of the issue is still being analysed by the exchange, with a message sent out to the market that order maintenance is possible for the time being.

Specifically, the SIX Swiss Exchange resumed trading for equities and investment funds at 1.30pm BST, while options and structured products resumed at 1.45pm BST and bond trading 15 minutes later at 2pm BST.

The trading venue halted early on Wednesday and looked to be rebounding around midday before being halted again at 11.23am BST, as reported by The TRADE.

This is the second time in the space of just over a year that Swiss Exchange has seen a major disruption. Last June, the venue experienced its worst outage for over a decade wherein trading was halted for three hours following issues with equities and options trading. 

This outage comes amid a string of similar incidences across both the EU and the UK, fuelling the flames of market pressure to reinforce key infrastructure.

Read more: Market outages are one area where UK and EU could collaborate amid divergence, says Cboe

Regulators globally are continuing to pile the pressure on exchanges to maintain the stability and resilience of the financial markets, particularly as regards their communications during times of uncertainty.

So far this year, up to 50 customers were affected by Nasdaq matching engine outage in March, while more recently in July LSEG and several other trading venues’ operations were impacted by global IT issues related to a Microsoft technology outage.

Some of the biggest hits came in the second half of 2023 – the London Stock Exchange (LSEG) experienced two outages on AIM stocks between October and December, whilst in November 2022 Nasdaq Nordic markets experienced a major outage so significant that it saw markets close without Auction.

These events are just some examples of major outages of this kind on primary exchanges over the last few years, with others including those seen on Deutsche Boerse and Euronext.

As trading disruption events at venues themselves demonstrably persist, the market is keenly aware of the fact that though prevention is of course better than cure, if these issues are seemingly destined to persist there is a real need for more efficient processes in terms of effective communications. 

No longer can traders and other market participants be expected to call client to client, rely on slow message boards, and be kept guessing as crucial time slips away – evidently more structure is increasingly necessary.

Read more: ESMA publishes recommendations for trading venues in the event of a market outage

Speaking to The TRADE, FIX Trading Community’s executive director, Jim Kaye, confirmed that the industry as a whole has their attention firmly on more solid processes in the event of outages.

Addressing when communication is most important, Kaye asserted: “What we’re talking about here is more the ‘heat of battle’ type messaging, as opposed to postmortems. The idea being that these messages in theory could be fed directly into trading infrastructures, which in turn could react directly. We should be conceptualising the idea that, if you get a message from a venue about an outage, there is a plan b.”

The post SIX Swiss Exchange resumes trading following four hours down appeared first on The TRADE.

The exchange was halted earlier today and looked to be rebounding before being halted again at 11.23am BST, The TRADE understands.

According to SIX Exchange: “The technical problems with the dissemination of indices and market data in Switzerland and Spain is still ongoing. Trading on SIX Swiss Exchange has been halted again until further notice due to ongoing technical problems.”

Trading at BME Exchange currently is not being affected by these events. 

The issue, raised earlier today, affected structured products on SIX Swiss Exchange, specifically: bonds, derivatives, exchange traded products (ETFs), equities, and funds.

SIX MDDX provides vendors with real-time market data from the SWXess trading platform, SIX index data, Swiss fund data, reference data from CONNEXOR and other sources, bespoke data sets, and third-party content. 

SIX has confirmed that they are in the process of investigating the root cause in order to solve the problem.

More to follow…

The post Trading remains halted on SIX Swiss Exchange appeared first on The TRADE.

These innovations have attracted a wide range of investors – from institutional to retail – who seek to increase returns and manage risks in an ever-shifting market environment. However, huge disparities exist between trading volumes in the US and Pan-European markets. 

Looking at the data, iShares by BlackRock reported that in the first quarter of 2024, trading volumes for US ETFs were at $10.6 trillion. In Europe, ETFs accounted for $782.9 billion in the same period. This can be attributed to differing ways in which active ETFs are adopted, fragmentation in Europe, differing levels of retail engagement, as well as the presence of an established consolidated data source in the US. 

A key theme linked to the evolution of ETFs globally has been the increase in scope of products offered to the market. Product type enhancements have led to a wider range of prospective investors. As a result of this increased demand and competition, costs have risen, which have ultimately led to ETFs attracting more attention from investors. Assets under management (AUM) and trading volumes for this asset class have experienced a significant rise over the last few years. 

“Consequently, ETF trading techniques have evolved to source new pricing opportunities either via electronic request for quote (RFQ) platforms and/or ETF algos and to take advantage of ETF trading provision at the exchanges themselves,” says Tim Miller, senior trader at Fidelity International. “We have also seen traditional ETF liquidity provision firms moving into forming bilateral relationships with buy-side dealing desks which has further strengthened ETF pricing.”

Active ETFs

Actively managed ETFs have introduced a new dimension to the ETF landscape. The instruments combine traditional active management with the liquidity and transparency of ETFs, while providing access to specific investment processes such as index outperformance and income generation, alongside maintaining the key characteristics of ETF structures. 

“Active is a game changer and it’s going to broaden the audience yet again for the product set. It’s going to disrupt the traditional mutual fund market and I truly believe it’s going to position ETFs as the wrapper of choice for managers,” says Chris Gooch, head of ETF/index sales and business development, EMEA at Citi. 

“What’s particularly notable is the willingness of big asset managers to launch their latest active strategies in an ETF wrapper. And for me that means that every asset manager is going to need to have a clear strategy of how they’re going to respond.”

The US market is undeniably ahead of Europe in its adoption of active ETFs thanks to the Securities and Exchange Commission’s (SEC) relaxation of its regulation in 2019, which resulted in more discretion in ETFs.

The relaxation meant that ETFs would no longer have to make their holdings public on a daily basis, which became more attractive to active fund managers who view their stock picking abilities as intellectual property. Within Europe, disclosure on portfolio holdings is still required on a daily basis, and has previously stifled adoption in the region. However, with time, adoption of active ETFs is becoming more apparent. 

“The impact of there being more acceptance of active ETFs within Europe means that when you look at trading costs like spreads or the creation redemption costs, you’re starting to see them narrow and become more like passive traded ETFs,” notes David Smith, head of ETF sales at SIX Swiss Exchange.

“There’s less difference between the two and we’ve seen the popularity certainly increase in active ETFs. All that being said, active is a small part of the European ETF industry, accounting for approximately 2% of AUM according to ETFGI as of April 2024.”

Active ETFs have been released across different asset classes and have appealed to new and old ETF investors alike as they provide middle ground between passive and active investing, emphasises Miller. 

“Through active ETFs, managers are able to offer access to internal intellectual property and house expertise such as bottom-up stock research, allocation weightings etc that not only differentiate their product but can help investors generate alpha for a portfolio alongside core passive holdings,” he says. 

Disparities in trading volumes 

Despite continued evolution for the asset class in a broader sense across the globe, it can’t be ignored that trading volumes for ETFs in the US far exceed those in Europe and the UK. This reflects a more mature and established market present in the US, with greater investor adoption and noticeable liquidity.

“At the broadest level, the US ETF market benefits from having launched the first funds around 10 years ahead of Europe and therefore is much more embedded in the investment psyche, particularly among retail investors,” highlights Miller. 

“Although the US ETF market is undoubtedly larger than Europe, the top 100 US-listed ETFs account for around two-thirds of both the entire US ETF assets and trading volumes, demonstrating that the US is characterised by a relatively small number of mega AUM ETFs and mega-liquid ETFs. Outside of the top 100 or so it starts to look a lot more like Europe.”

Several factors exist which contribute towards greater ETF volumes in the US. Europe and the UK have noticeably less AUM linked to the segment, but also, various jurisdictions, venues and clearing houses which contribute to the disparities in trading volumes. 

“In Europe, there are about 11,000 different trading lines of ETFs. That liquidity can be spread across the different countries and different listings,” highlights Smith. “There’s multiple listings of the same ETF, whereas the US doesn’t face that same problem and that can mean that liquidity is more concentrated in a fewer number of ETFs.”

ETFs in the US typically experience more favourable liquidity compared to their European counterparts, resulting in narrower bid-ask spreads and more efficient trading. Contrastingly, European ETFs often experience lower trading volumes, which can lead to wider spreads and less favourable execution for investors.

“The US has many immensely liquid, mega-sized ETFs that trade colossal amounts. Europe just doesn’t have the liquidity that the US does,” emphasises Simon Barriball, ETP and portfolio trading Europe at Virtu Financial. “We don’t have ETFs with that scale of AUM in them or anything like the daily turnover on screen in the US and that’s a huge differentiator.”

Fragmentation 

With ETFs increasingly becoming more popular in Europe, fragmentation and regulation have been pegged as two key pain points that need to be addressed going forward to boost growth in the region – a viewpoint that has been echoed at various panels at conferences in recent months. 

“The most obvious impact of fragmentation has been on the perception of an absence of secondary-market liquidity,” highlights Miller. “This has mostly likely held back some adoption of ETFs from investors but has also led to increased innovation from all market participants to source, aggregate and efficiently price ETFs.”

Echoing this sentiment, Citi’s Gooch notes that European fragmentation makes it hard for investors to get a true representation of what the actual liquidity is for ETFs in the European market. 

“That [fragmentation] has led to the perception, I would argue incorrectly, that the European market is not liquid,” argues Gooch. “This has stopped new clients adopting ETFs and has led some clients to trade ETFs listed in the US, rather than ETFs listed in Europe, even with the structural benefits that European ETFs can present to certain investors.”

Fragmentation does, however, provide some benefits, in the sense that it gives investors increased choice when considering their different objectives, where to trade and settle, as well as the types of currency they would like to execute in. It is, nevertheless, more complicated to navigate a fragmented environment, especially if liquidity does not always appear to be there across the different lines of ETFs. 

“The fragmentation in Europe extends to the fragmentation of how orders are executed. Probably only about 20% of trading is on exchange, 50% of trading is in RFQs and the remaining 30% are over SIs and other MTF type venues,” notes Barriball. “There’s also the fragmentation of trading and I think that in itself, affects the perception of liquidity as well, because you need to have a broker who can help you find where the liquidity is.”

Retail

Another key driver that leads to the disparities in trading volumes when comparing the US with the UK and Europe is the region’s differing levels of retail participation – with retail activity making up 5-7% of total trading in Europe compared to over 25% in the US . As a historically more passive instrument, ETFs have proved popular with retail investors who don’t want to take on too much risk. 

“Already, it’s a bigger market, but the split of that market is much more evenly institutional and retail,” says Gooch. “There’s much more of a trading mindset in how they’re using the products, whereas the institutional client base, particularly in Europe, is much more around strategic asset allocation and tactical asset allocation, which doesn’t have the same trading velocity.”

Retail adoption of ETFs in the US is more prevalent than in Europe largely because of a more widespread investment culture among individuals, backed by more favourable regulatory conditions. The US also has a larger variety of ETFs available and when paired with better investor education and greater access, this encourages more participation from retail investors. 

“Increasing adoption of ETFs from the retail community combined with improved connectivity from platforms to exchanges creates opportunities for buy-side dealers to interact with these improved volumes on exchange as professional and retail volumes create a better dynamic for orderbook trading,” notes Miller. 

Technology firms, in this context, are able to help platform providers simplify ETF procedures, ultimately removing complexity linked to legacy systems, to enable clients to have improved ETF trading experiences on said platforms. 

Elsewhere, looking forward, Citi’s Gooch suggests that the EU’s retail investment strategy also has potential to help boost ETF participation in the region. “Some of this was watered down from what many in the ETF industry were hoping for, but it is, at the heart of it, pushing for retail investors to be treated much more fairly,” he says. “The ETF as a cost-efficient vehicle can only win from that statement of intent.” 

Consolidated tape

Looking at potential innovations to boost ETF adoption in the UK and Europe, it comes as no surprise that one of the first things that comes to mind is a consolidated tape. A consolidated tape in Europe will enhance transparency and price discovery in the ETF market, simplifying investors’ access to real-time data across different venues. 

As a result, the improved visibility could lead to a boost in market liquidity and efficiency, which would be beneficial for all market participants. It could also lead to a boost in retail volumes if individual investors had access to a clearer view of the market, alongside more participation from institutions.

“If you understand what the aggregate volume is and the true volume, it’s a real benefit to issuers trying to get people to invest in ETFs in the first place, because you realise just how liquid they are in aggregate. The absence of that information means you have to go looking for it – and many people don’t,” argues Barriball. “A consolidated tape would have huge benefits to ETF issuers trying to get more money into ETFs, improving people’s understanding of aggregate liquidity and also for making meaningful pre- and post-trade calculations.”

Such benefits have already been observed in the US, which has had an established consolidated data source in place for years. This creates enhanced market transparency by providing real-time, consolidated trade and quote data across all major exchanges, helping improve price discovery, market efficiency, and investor confidence through the presentation of key market information.

“In the US, where we do have a consolidated tape, that has allowed for the asset class to grow at a much bigger rate from a distribution standpoint when liquidity is easily accessible, easily visible and the execution quality that comes on the back of that is just better. It’s allowed many different firms to launch ETFs and grow AUM by going out to the investor community and selling those ETFs confidently,” says Brian Gilman, ETF & FI liquidity sales at Virtu Financial.

“In the States, you’re already starting with this head start of investor confidence because of execution quality and the consolidated tape. From a distribution standpoint it’s an easier arena for sure.”

Regulators within Europe and the UK appear to be geared towards ensuring greater transparency, which is manifesting itself through a consolidated tape. However, how this will materialise when considering ETFs specifically has not yet been finalised. Regardless, it’s expected that it will help with frustrations associated with fragmentation as discussed before. 

Lessons from the US

When comparing these two regions, it’s worth considering what could be learned from the US and translated into European markets to help improve the ETF landscape. The US has a handful of very dominant exchanges, one dominant clearer and a key currency. However, such characteristics cannot directly be translated into a European context.

“There is a lot around the US that simply are structural advantages of that market which we cannot emulate,” emphasises Gooch. “However, we’ve got the innovation that’s currently happening around retail and is appealing to the next generation of investors, which is great because that’s where there’s going to be this huge passing of wealth.”

Moving forward, there are number of things that can be adopted from across the pond to help boost trading volumes within the UK and Europe. Namely, boosting active ETFs through the relaxation of regulations linked to disclosures, a promotion of retail engagement, and greater transparency in the form of a consolidated market data source, which will ultimately contribute to more liquidity. Can Europe eventually match or compete with the US when considering trading volumes for this specific asset class? Only time will tell – following in the US’ footsteps might not be such a bad idea.

The post Lessons to be learned from the US to boost European ETF growth appeared first on The TRADE.

There has been a clear trend over the past 5+ years that the proportion of average daily turnover executed at the close has increased and various contributing factors have been suggested as drivers of that. This includes the mooted rise of passive investment strategies, the continued importance of the closing price as a desirable benchmark, the evolution of alternative market mechanisms that drain liquidity out of lit-continuous trading phases and the effect of algorithmic trading strategies reacting to a redistribution of liquidity towards the close – in other words, liquidity begets liquidity.

So what is the fallout of this? Some argue that there is increased risk when a larger proportion of daily liquidity is concentrated in a single liquidity event, but whilst the impact may be higher it doesn’t necessarily mean that likelihood of a disruption to such a liquidity event is greater compared to likelihood of disruption to intraday trading sessions. However, it potentially influences the dynamics of price formation and the capacity for immediate risk transfer throughout the course of the trading day.

The continuous trading phase on central limit order books (CLOBs) is a critical source of price formation and liquidity certainty. Their prices are referenced directly across many alternative trading mechanisms and also indirectly in closing auctions, which typically have volatility interruptions based on percentage deviations from the last traded price in continuous trading. Hence, it is important that an unfettered shift in liquidity dynamics does not undermine essential market mechanisms like the continuous trading phase on CLOBs.  

Are exchanges making any moves to address this increased concentration?

Across the street, a lot is evolving in the space. One of the things we’re seeing are additional mechanisms which have come to market, that facilitate continuous intraday crossing opportunities.  Some of these, like periodic auction models are not new, whereas more recent evolutions – such as bilateral price streaming, segregated retail liquidity models, and trajectory crossing models – are focused on matching of specific types of flow with appropriate contra liquidity. Such mechanisms provide alternative ways for participants to access intraday liquidity on a continuous or semi-continuous basis, but also potentially drain displayed liquidity away from lit-continuous trading sessions on CLOBs.

Additionally, venues incentivising broker-preferencing in non-continuous trading sessions may further encourage additional liquidity into auction phases, increasing the proportion of daily liquidity traded at the close.

We’ve also seen an evolution of how people trade in closing auctions. With the size and variability of the average closing auction imbalance reducing significantly across European orderbooks over the past 5+ years. This will be driven in part by growth in internalisation around the close, but also in part by auction strategies that constrain auction participation based on the theoretical closing volume in order to reduce price impact.

The fairly ubiquitous use of participation caps in closing auctions is why for example SIX innovated to introduce the Auction Volume Discovery (AVD) order type, which essentially is a non-displayed auction order type that has no impact on theoretical closing volume or price. It provides a suitable mechanism to encourage volume constrained liquidity back into the closing auction in order to maximise matching opportunities. Since launch, we see evidence of such volume constrained liquidity coming back into the closing auction via AVD and changing the auction imbalance picture. This likely underscores the benefits of centralising rather than fragmenting liquidity around such an important daily liquidity event.

How can – or is – the industry balancing liquidity needs with market stability?

Periods of significant volatility are of course difficult to predict, and though we don’t necessarily live in a highly volatile market environment every day – we still have some significant blips. When these occur you typically see increases in volume traded as investors are trying to adjust their positions to respond to rapidly evolving market conditions. 

In such periods, the opportunity cost of not trading outweighs the opportunity cost of trading sub-optimally from an execution performance standpoint. Certainty of liquidity becomes a priority, which is why we often see evidence of a flight toward lit order books where liquidity and price is clear and transparent. In periods of low volatility and low volumes, managing for price impact in thinner orderbooks can prompt market participants to explore alternative execution mechanisms. It is a fine balance, between ensuring that price and liquidity certainty is not unduly diluted in optimising for execution performance. This probably necessitates that appropriate regulatory frameworks are in place to help preserve important market mechanisms, but conversely it can’t be regulation that stifles innovation and the ability for end investors to execute in a way that benefits them.

SIX has long been a staunch advocate of competition, innovation and offering a selection of market mechanisms – but we also advocate that price formation, transparency and equality of access are critical for the market.  It is a tough balance for the market as a whole to get right.  

Looking at the rest of 2024, what is the biggest challenge facing traders? 

In general, I think market participants are really cognisant of the challenges of what appears to be a relative drought in liquidity in Europe relative to other markets. There has been recent conjecture as to whether the addressable liquidity picture in Europe is being distorted and understated due to how certain off-book / OTC trading activity is being reported – in particular, bilateral price-streaming mechanisms and specific swap trading scenarios. Such topics will probably be a re-invigorate of some of the well-trodden debates we have seen in the past around appropriate market structure, regulation and reporting regimes. The recent release of the next ESMA consultation will provide a focal point around which such debates will play out – with a focus on reducing complexity and increasing efficiency within the equity trading ecosystem. 

This is of course important, however we’re also facing a changing political landscape at present (being a super election year) and that perhaps presents us with a collective opportunity as an industry to address some of the other elephants in the room that act to restrain equity trading volumes. Such examples include the taxation of equity trading, accounting principles and/or prudential requirements that significantly restrict pension and insurance funds from holding equities, and the overreliance on bank loans as the primary source of growth capital for SMEs in Europe. 

In advocating for a rethink on such topics we need to ensure policy makers and the wider public understand the benefits of thriving equity markets. They help to drive the real economy, are a wealth creation tool for retail investors, and stimulate resilience to and recovery from economic shocks. It is vital that such topics are given as much consideration as those aimed at reducing market complexity. 

The post Fireside Friday with… SIX Swiss Exchange’s Simon McQuoid-Mason appeared first on The TRADE.

The service is available through the CONNEXOR API. Users can subscribe or unsubscribe to instruments via ISIN requests to obtain end-of-day valuations for non-listed structured products.

“The launch of this service marks another important milestone for our CONNEXOR offering, a comprehensive solution around financial products data,” said Francesco Marcon Fiastri, head of sales for structured products and CONNEXOR, SIX Swiss Exchange.

The API integrates valuations and risk figures for structured products across markets while also leveraging various pricing engines and real-time data analysis. Meanwhile, automated coverage checks ensure data availability and cost transparency for each product globally.

“At Avaloq, we work closely with our ecosystem of partners to drive innovation in the financial industry,” said Andreas Diener, head business strategy and offering wealth products at Avaloq.

“Our partnership with SIX to develop the Independent Valuation Service demonstrates our commitment to providing cutting-edge solutions that simplify investment processes and enhance decision-making capabilities for our clients.”

SIX has found itself in a launching streak in the last 12 months, much of which has a data spin. Also new to its roster is a new Corporate Action Calendar providing clients insight into corporates movements launched in November 2023 and crypto reference rates and real time indices for institutional investors announced in February 2024.

The post SIX partners with Avaloq on new instrument valuation service appeared first on The TRADE.

Millennium appointed You Khai Tan as senior trader, based in Singapore. He joined Millennium from UBS, where he spent the last 13 years, based in Hong Kong and Singapore. Most recently, Tan held a global portfolio trading position, which included trading global equities with strategy implementation via algorithms, crossing networks and global portfolio trading desks. Prior to that, Tan held a global markets, APAC cash equities position based in Singapore. Elsewhere in his career, Tan served at Maybank Investment Banking Group in an equity sales trading role.

HSBC appointed Matthew Stanton as managing director, head of equities sales trading for Americas. Stanton joined HSBC from Primary Portal, where he served as a sales consultant. Prior to that, he spent just over seven years at Barclays, most recently serving as managing director, head of cash sales trading, Americas. During his tenure at Barclays, Stanton has also served as head of cash sales trading, EMEA, based in London. Earlier in his career, Stanton spent 18 years at Goldman Sachs in a variety of senior roles based in New York and London. This included equities sales trading positions for both the Americas and EMEA. He initially joined Goldman Sachs as a NYSE floor trader.

Nomura named Hemish Shah head of EMEA flow rates in a bid to strengthen its franchise. Shah has 15 years of industry experience and was most recently head of EGBs, bond derivatives and euro inflation trading at Deutsche Bank. His expertise includes a proven track record of developing trading and risk management strategies. In this new role, he will report to both Richard Volpe, global head of rates, and Nat Tyce, head of global markets EMEA.

US-based block trading start-up OptimX selected a former Virtu buy-side sales specialist to become its new head of institutional sales. Michelle Butler joined OptimX to head up its buy-side business after most recently serving at Virtu for 19 years, managing sales for its POSIT Alert business. Prior to joining Virtu, she spent six years as head of sales and coverage at E-Crossnet – one of Europe’s first peer-to-peer crossing networks.

The post People Moves Monday: SIX Swiss Exchange, Millennium, HSBC and more… appeared first on The TRADE.

Christian Reuss, Werner Bürki

Reuss has been with the trading venue for just over 15 years, originally joining in 2009 as chief executive of a joint venture named Scoach, in partnership with Deutsche Börse.

He later moved into a role as chief executive of SIX’s structure products exchange in 2013, rising up the ranks to chief executive  of SIX Swiss Exchange in 2020.

Head of trading at SIX Swiss Exchange, Werner Bürki, has been selected to replace Reuss on an interim basis.

SIX confirmed recruitment for a full-time replacement is in progress.

“Today, I ring my personal Closing Bell at SIX Swiss Exchange,” said Reuss in a statement on social media.  “It was a tremendous ride. Thank you all for contributing to this remarkable experience.”

Reuss has had an extensive career to date, after also previously serving as an executive director in the equities division at Goldman Sachs for seven and a half years.

The post Head of trading to take the reins at SIX Swiss Exchange as chief departs appeared first on The TRADE.

Named Quote-on-Demand Europe (QOD Europe), the newly extended service comes as part of SIX’s desire to become a one stop shop. It claims to achieve execution at the European Best Bid Offer (EBBO) for around 95% of trades.

The service allows clients to trade both ETFs on its own venue and on other primary exchanges including the London Stock Exchange, Deutsche Boerse, Euronext, Nasdaq OMX and Wiener Boerse. Approximately 6,000 ETFs and ETPs are tradable.

“SIX Swiss Exchange has been a trailblazer in the ETF industry for over 20 years. The launch of ETF QOD Europe reaffirms our commitment to innovation, providing a unique, cross-market trading experience for our users. We believe this groundbreaking service will set a new standard in the European ETF landscape,” said Christian Reuss, head of SIX Swiss Exchange.

“ETF QOD Europe not only expands the variety of ETF products available but also addresses the need for a greater variety of execution mechanisms to satisfy best-execution in ETF trading.”

The service leverages an open access model for post-trade, allowing clients to use straight-through processing, including central counterparty (CCP) clearing in order to minimise costs and counterparty risk.

SIX Swiss Exchange confirmed it is working with its internal CCP, SIX x-clear, as well as with Cboe Clear Europe and LCH Ltd.

“This demonstrates our desire to improve Europe’s ETF market structure and deliver innovative services that allow participants to manage their risks of trading this asset class,” said Vikesh Patel, president, Cboe Clear Europe.

“It also signals our steadfast commitment to open access and clearing interoperability, which brings proven benefits in terms of innovation, post-trade efficiencies and greater participation through reduced costs.”

The post SIX launches request for quote trading for ETFs appeared first on The TRADE.

The FCA decision was aimed at controlling the amount of equity trading which takes place away from public exchanges, however, Tony Shaw, executive director and head of sales, UK & Ireland at SIX Swiss Exchange, explained: “Traders seem agnostic as to whether the double volume caps are in place or not, regardless of the political rhetoric.”

He further highlighted that mechanisms – for closing auctions, systematic internalisers (SIs), block trading venues, periodic auctions – were in place even prior to Brexit in a bid to address the market demand for dark trading.

See more: The TRADE dark trading documentary series

The FCA’s stance on dark trading follows on from its previous findings back in 2021, which at the time contradicted similar research from the EU. The EU has previously made efforts to restrict trading in dark pools to increase activity that occurs on pre-trade transparent or ‘lit’ venues, introducing double volume caps in 2018 under Mifid II, triggering bans on dark trading when a transaction reached a certain size.

The European Securities and Markets Authority (ESMA) previously stated in a review of Mifid II that the DVCs have had a limited, but overall positive effect on market liquidity. 

Market participants, however, have continually been vocal with criticisms on the move by regulators in Europe to curb dark trading, claiming that the practice allows for minimal market impact and often the best price for clients.

Read more: Trading in dark pools and periodic auctions lowers execution costs, FCA paper concludes

Overall survey findings from SIX, which included responses from 2,000 European traders, confirmed that these individuals are seeing equity trading shift towards alternative trading mechanisms as concerns around liquidity persist.

Around half of respondents (47%) pinpointed lack of available liquidity as the biggest trading challenge – followed by 24% which highlighted volatility.

SIX Swiss Exchange highlighted that trading venues are a viable alternate execution choice amid liquidity worries.

Speaking to The TRADE, Shaw explained: “This year we’ve increasingly seen large volumes of trading activity being carried out on closing auctions. In a market landscape where liquidity is proving harder to find, the ability to execute large orders, at the closing price and during a time when the market is focused on a single trading event at the end of the day, is in strong demand. Exchanges need to factor this in when considering the ways in which they can assist market participants.”

The survey found that decreasing liquidity in continuous on-exchange trading is most likely to flow into dark pools and closing auctions, with 31% and 27% of respondents highlighting each respectively. 

Shaw said: “As liquidity shifts away from continuous lit trading, exchanges need to innovate to offer members additional solutions. Our non-displayed pool Swiss-At-Mid that includes block functionality, our additional session Trading-At-Last, and our Auction Volume Discovery order type all satisfy the traders’ increasing need for flexibility and have all seen growth since their respective launches. 

“Volume attracts volume when it comes to European equity markets. As a single event which the entire market is focused on, end of day auctions increase the chances of traders finding much sought-after liquidity,” Shaw added. “Our most recent innovation, AVD functionality, helps to stitch sidelined liquidity together and bring it back onto the exchange.”

Read more: SIX expands closing auction offering to protect buy-side when executing large orders

Elsewhere, the findings suggested that trading activity is shifting away from exchanges, with 15% of traders suggesting moves to SIs, and 14% highlighting OTC markets. 

Addressing the current state of play, Shaw highlighted that the most important aspect is the existence of a level playing field: “Alternative mechanisms facilitate different types of interactions for a kaleidoscope of different objectives, but if it’s completely to the detriment of public orderbooks, that’s not helpful either. Fair and transparent price formation remain the lifeblood of liquid markets.”

The post Half of traders convinced FCA post-Brexit DVC decision will have little bearing on dark trading appeared first on The TRADE.