The key takeaways from the Equities live meeting!

Optimising Workflows

  • Whatsapp recording solution is a game changer
  • Use a chat bot for research distribution
  • We should make more use of centralised business information & communication channels to speed up conversations internally and externally
  • Alerts on trading into Symphony + TCA records + EMS Connection
  • Standardized formats across platforms (use tags etc)
  • Interest in flextrade EMS/OMS
  • Can access non front office workflows across firms
  • Inter company communications needs to be worked on as we return to the office.
  • Consolidation of bots/messaging solution to IB availabilities across middle/back office
  • Increasing need to disrupt RFQs workflow
  • Consolidating quotes/chats/alerts/signals is a holy grail!
  • App to consolidate communication + built automation on top
  • Set up real time market data alerts for wheel flow
  • There is a lack of resources to build workflows on the buy side. Symphony solution can help with this.
  • There is the ability to use the system for more than chats – e.g. holdings, reports and new issuance
  • Can make use of internal teams’ coding ability and build own tools and workflow solutions
  • Some trading desks are retiring their dealerboards – does this mean no more phone calls?
  • Younger traders are more willing to code/take on projects
  • Optimising newsflow through automated processes is a possibility that can enhance PMS experience but needs the correct filtering

Market Microstructure

  • Additional UI needed to level the conditional playing field
  • Useful cost insight into trading the close. Good to see similar views on overall use of TCA in volatile markets
  • TCA can be a helpful tool but it is also important to take liquidity when you can not when you need to
  • There is a lack of understanding of the real cost of trading in a closing auction
  • It costs 0.4bps to trade with LSE in the close vs. 0.8bps in Europe. Needs reviewing.
  • Volatility can lead to disincentives for block trades, but although this may be true from a TCA perspective, the focus should be on the trader being able to explain decisions as he made them.
  • TAL volumes are low
  • LSE closing auction is good value
  • Shoren TAL to encourage move interaction
  • More conversations with traders needed about their mechanics
  • Need to push brokers on TAL adoption
  • Want the ability to interact with £100m and blocks if/when a previous block happened

Venue Selection

  • The European market is 10x less liquid than in the US. Some questions to ask brokers by buy side firms should be communicated by CBOE.
  • Consolidated tape will add to market resilience
  • Broker customisation is different for each desk
  • Some firms customise on venue selection and some leave it to the brokers.
  • Better algo questions needed by the buy side to assess brokers
  • Should be more proactive in discussing how self directed algos interact with periodics
  • More transparency from brokers about how they participate in venues is needed
  • Venues / exchanges can help buy side firms hold brokers to account and to ask the right questions
  • General view that there has never been such a large difference in algo performance across providers
  • Smaller providers are more flexible and offer better overall service
  • Broker customisation of algos is important. The turnaround time for implementation of change is still too big. Once a need for change is identified, it should be quicker to implement.
  • Highlighted the need to review how quickly brokers adapt to new venue functionality & order types
  • More communication and knowledge on order types needed so buy side can question the brokers
  • Brokerlogic may not be listening to the venue data leading to missing liquidity
  • More information on order types empowers the buy side to ask more + better questions
  • Not having a consolidated tape is part of the reason for no IPOs in EU
  • Look to spend time analysis fill/venue data on past trade basis

Data Analysis

  • It’s very useful to benchmark against peers
  • Strong focus on execution – short term vs overlay / long term exposure management
  • The feedback loop from data analysis direct into EMS is the next challenge to overcome
  • PA profiling should be taken into consideration
  • Data is clearly central to the investment + execution process and is a key requirement to achieving the marginal gains we strive for in performance
  • How can you measure the decision process of the fund manager?
  • Still need better and more informative pre-trade data
  • Analysing slippage/ trade performance from PM decision to trade as opposed to order pick up.
  • PM decision time to order generation. How can we measure time & cost?
  • Greatest impact on the TCA is looking at the unrealised point of the trade

 

  • Click reduction = increased efficiency
  • Moving desktop to become far more connected, using apps together vs.individual at present. Speed and efficiency tangible to help justify internally.
  • Not just for trading – it’s relevant inter-team
  • Possibility of moving from ‘jack of all trades’ systems to specialist ones.
  • Interoperability is being able to unify data/processes across platforms.
  • There is a clear need for systems to speak to each other
  • Business should drive desire to ensure interoperability for workflow and systems – don’t just leave to IT.
  • FDC3 – is the new standard of systems talking to one another
  • System interoperability – the key is different systems must integrate well together
  • There are actually ways to get systems to talk to one anotherGive the user the capacity to bias workflow
  • Interoperability improves efficiencies
  • It’s a basic concept but effective
  • The buy side needs to understand what we want to improve and work on one thing at a time
  • Technology has advanced – what seemed like a pipedream may be possible now. It is time to revisit previous plans

Desktop Interoperability

  • Click reduction = increased efficiency
  • Moving desktop to become far more connected, using apps together vs.individual at present. Speed and efficiency tangible to help justify internally.
  • Not just for trading – it’s relevant inter-team
  • Possibility of moving from ‘jack of all trades’ systems to specialist ones.
  • Interoperability is being able to unify data/processes across platforms.
  • There is a clear need for systems to speak to each other
  • Business should drive desire to ensure interoperability for workflow and systems – don’t just leave to IT.
  • FDC3 – is the new standard of systems talking to one another
  • System interoperability – the key is different systems must integrate well together
  • There are actually ways to get systems to talk to one anotherGive the user the capacity to bias workflow
  • Interoperability improves efficiencies
  • It’s a basic concept but effective
  • The buy side needs to understand what we want to improve and work on one thing at a time
  • Technology has advanced – what seemed like a pipedream may be possible now. It is time to revisit previous plans
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