Specifically, the cloud technology will migrate multiple workloads and applications to Google Cloud’s infrastructure, including the use of Google Cloud’s Vertex AI platform which will deliver Gen-AI capabilities across the firm. 

Tim Ryan, head of technology and business enablement at Citi, said: “Citi is on a mission to modernise our infrastructure and increase our safety and soundness so that our businesses can continue to serve our clients with speed and agility.

“Leveraging Google Cloud opens up a whole new frontier for us in how we can run applications with faster and more comprehensive outputs, and provide our

colleagues with the tools they need to deliver for our clients.”

Citi is set to benefit from high-performance computing (HPC) and analytics platforms, which in Citi’s Markets business means the execution of millions of computations daily.

Read more: As cloud adoption across the market continues to rise, is the shift of liquidity itself next to follow?

“Our strategic partnership with Citi to continue to modernise its technology infrastructure and drive enterprise-wide innovation underscores Google Cloud’s commitment to helping the financial services industry transform with cloud and AI technology,” said Thomas Kurian, chief executive of Google Cloud. 

“By combining Citi’s deep banking and customer experience expertise with Google Cloud’s leading cloud and AI capabilities, we can deliver significant benefits to Citi’s clients and employees.”

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Citi has expanded its FX markets team in Asia with the appointment of two new individuals, according to an internal memo seen by The TRADE. Anand Goyal was appointed head of FX institutional sales for Japan, Asia North, Australia and Asia South, based in Singapore. Goyal joins from JP Morgan where he had been serving as head of macro FX and real money sales for Asia Pacific. Alongside him, Hooi Wan Ng was appointed head of markets for Malaysia. She also joins from JP Morgan where she had been serving as head of local corporate sales and private side sales.

Hugh Whelan was named head of liquidity management and data strategy at SGX FX, having previously worked as head of CME Group owned EBS Direct. Specifically, London-based Whelan will be responsible for overseeing the strategic direction and growth of the liquidity provider client segment. He is also set to develop the data products within SGX FX. Whelan’s career has had a strong focus on FX markets, having previously led the launch of EBS Direct into a new bilateral FX trading venue – which is now owned by CME Group.  

Muzinich & Co appointed George Kierton as a trader based in London. He joined from Amundi, where he spent the last two and a half years, most recently as a senior fixed income trader. Elsewhere in his career, Kierton served as a fixed income trader at BMO Global Asset Management and MUFG.

The post People Moves Monday: Groupama AM, Citi, SGX FX and more… appeared first on The TRADE.

Anand Goyal has been appointed head of FX institutional sales for Japan, Asia North, Australia and Asia South, based in Singapore.

He will report to Cécile Gambardella, head of sales for markets for Japan, Asia North and Australia and Sam Hewson, global head of FX sales.

“As we look to build on our market leading position across the region, Anand’s appointment is a significant move that aligns with our strategy. His expertise will enhance our ability to deliver tailored FX Solutions and foster stronger partnerships with our institutional clients,” said Hewson.

Goyal joins from JP Morgan where he had been serving as head of macro FX and real money sales for Asia Pacific.

Alongside him, Hooi Wan Ng has been appointed head of markets for Malaysia. She will report to Sue Lee, head of markets for Asia South and Vikram Singh, Citi country officer and banking head for Malaysia.

She also joins from JP Morgan where she had been serving as head of local corporate sales and private side sales.

“With Hooi Wan’s extensive experience and deep understanding of the local market, we are well positioned to grow our Malaysian franchise further,” asserted Lee.

“She will lead the markets business in Malaysia with a client centric approach, leveraging our global footprint and solution structuring capabilities.”

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Vincent Hall joined Citi as an equity trader following two years at Citadel where he served in the same role. He returns to Citi after four years, having previously worked at the firm as associate vice president in emerging markets equity trading. Elsewhere in his career, Hall has also worked at BlackRock as an associate.

Edward Tilly is set to take over as chief executive of Clear Street at the end of this year. The announcement comes two months after Tilly’s appointment as president at the firm. He replaces CEO and co-founder Chris Pento. Upon his departure, Pento is set to assume an executive and partner role at White Bay, the family office of co-founder Uriel Cohen. He will remain on the board of directors at Clear Street. Since joining Clear Street Tilly has worked closely with Pento, jointly leading the firm through the next phase of growth.

Jack Boland joined Ilex Capital in a US equity trading and global equity capital markets role. He joins from Citadel where he had been serving for the last five years as an equity trader and senior associate. Prior to joining Citadel in 2019, Boland spent five years at BlackRock as an associate and later a trader and just under a year at HBK Capital Management as a trader before that. Previously in his career, he undertook several banking, capital markets, and portfolio management internships across PwC, KPMG UK, BlackRock, and Jefferies.

Elijah Ibrahim Diallo joined Magellan Capital as a multi-strategy trader, based in the UAE. He most recently served as an investment manager at ADQ and before that spent two and a half years as a senior trader and portfolio manager at Azimut. In his career, Diallo has also worked as an equity trader at Avalon Capital Markets. Previous experience also includes stints at EFG Hermes and Mubasher Financial Services.

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This is according to a new report from Citi, which tracked the impact of a shortened settlement cycle across the world.  

The survey found that the transition has been particularly strenuous for European participants – 60% of which reporting a significant impact to their operations as a result of T+1. This figure has more than doubled from 2023.   

For specific affected sectors, securities lending remains one of the most strongly impacted activities — jumping from 33% to 50% this year. Funding has also seen notable impact — albeit with an imbalance across the sell-side and buy-sides. For brokers and custodians, the single biggest impact of T+1 has been the 30% reduction in clearing margin, with 80% of the sell-side seeing this development as strongly impactful to their businesses. 

Additionally, over half (52%) of banks and brokers reported that the transition has had a significant impact on their headcounts and staffing levels. The whitepaper added that sell-side organisations have found themselves exposed to large volumes of manual processing and exception handling, triggered by clients.  

Okan Pekin, head of securities services at Citi, said: “The move to T+1 has taken centre stage in the post-trade industry over the last few years. Our latest whitepaper – the largest since its inception in 2021 – focuses on the next frontier for the industry which is the growing applicability of technologies. This includes distributed ledger technology and digital assets, and the significant potential for tokenisation to scale. These developments will continue to transform the securities landscape as we continue to move towards shorter settlement cycles across multiple markets worldwide.” 

The whitepaper polled close to 500 market participants across the buy- and sell-side, and incorporates insights from 14 financial market infrastructures (FMIs). The report also includes an regional view of the industry across Asia Pacific, Europe, North America, and Latin America. A full copy of the study can be found here.

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He returns to Citi after four years, having previously worked at the firm as associate vice president in emerging markets equity trading. 

Elsewhere in his career, Hall has also worked at BlackRock as an associate.

Read more: Fireside Friday with… Citi’s Chris Gooch

Earlier this year, Citi appointed Jamie Miller as new head of electronic equity sales trading for the EMEA region, as revealed by The TRADE. 

Miller has been with the firm eight and a half years as an employee of the bank, specialising in equity sales trading.

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Gurpreet Ubhi has been selected to oversee FX sales for the region at Morgan Stanley after most recently serving at Citi for the last eight years. He announced his departure from Citi on social media two months ago.

Ubhi originally joined Citi in 2016 as a vice president in electronic FX sales, later taking on his most recent role as director in the same division in 2019.

Previously in his career, he spent almost two years in eCommerce sales at Deutsche Bank, three and a half years at Bloomberg in FX and electronic FX sales and conducted a year’s placement at State Street in FX research.

Morgan Stanley declined to comment.

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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.

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Citi named Jamie Miller head of electronic equity sales trading for the EMEA region. Based in London, Miller was appointed to head up the division in EMEA after eight and a half years with the bank, specialising in equity sales trading, according to an update on his social media. Miller originally joined Citi after serving for two internships in the bank’s markets division in 2013 and 2014. He joined as a permanent fixture in 2016 as a graduate analyst in the markets division and later moved into equity sales trading in 2018. He has subsequently continued to rise through the ranks, landing his first vice president role in 2021.

State Street appointed Tomas Truzzi as chief executive of State Street Brazil, replacing Telly Theodoropoulos, who led operations in the country since its foundation in 2019.In the role, Truzzi will be responsible for overseeing all strategic initiatives and operations within the country, with a view to promoting growth within one of Latin America’s key markets. Truzzi joined State Street Brazil as head of FX trading. In his previous role, he oversaw the foreign exchange market making desk and managed Banco Commercial’s local treasury function. Prior to joining State Street, Truzzi worked for Standard Chartered in Brazil as head of trading, responsible for reorganising its local fixed income, foreign exchange, and derivatives businesses. Before that, he served in several roles at Morgan Stanley throughout a 13-year term and managed trading desks in Sao Paulo, New York, and London, with a focus on FX, fixed income, and derivatives. 

NatWest appointed Imogen Bachra to lead its global desk strategy team, taking on the role of head of economics and markets strategy. She is set to provide a data-driven approach, providing views on key macroeconomic and market themes across various regions and asset classes. As part of her new role, Bachra will join the trading and sales management team and report to Simon Manwaring. Bachra joined the bank in 2014 and most recently led the UK rates strategy and non-dollar rates strategy. Prior to NatWest, she held positions at Credit Suisse, HSBC, and Royal Bank of Scotland. 

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Jamie Miller

Based in London, Jamie Miller has been appointed to head up the division in EMEA after eight and a half years as an employee of the bank, specialising in equity sales trading, according to an update on his social media.

Miller originally joined Citi after serving for two internships in the bank’s markets division in 2013 and 2014.

He joined the bank as a permanent fixture in 2016 as a graduate analyst in its markets division, later moving into equity sales trading in 2018. He subsequently has continued to rise through the ranks, landing his first vice president role in 2021.

His is the second major appointment at Citi in recent months after the bank also appointed a new head of North America markets alongside other senior appointments.

Mitali Sohoni was selected to head up the bank’s North American markets business alongside her existing role as head of asset backed financing in May. In her new role as head of NAM markets, she will coordinate strategy for the division.

Alongside her appointment, Citi also named a new chief executive of its broker dealer entity Citigroup Global Markets Inc (CGMI), Dina Faenson.

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