THE EMPOWERMENT OF THE BUYSIDE.
Will Geyer speaks to Best Execution about the future state of trading.
Having had extensive experience of the both the buyside and sellside what changes have you seen?
I would say that five years ago the buyside wanted the hot keys and algo strategies that could be customised around the way they traded. Today, the emphasis is much more on using market data and proprietary research to make better-informed dynamic trading decisions. The information gives them a greater understanding about the way brokers and venues operate. This has been an evolutionary process although it has recently accelerated. Several years ago, firms would use tools to improve trading decisions but now they want to have better insight into the building blocks underlying those tools. We have developed workflows that have assimilated the data and created a customisable environment which enables clients to efficiently adapt to market changes.
What are the drivers behind this?
The lines between the sell and buyside have continued to blur. The buyside want to have more direct engagement with liquidity without an intermediary and also, similar to the sellside, they want to capture all the necessary data to meet future and existing regulatory requirements. The other major trend is that clients no longer just have an equity trading desk but are looking for opportunities across the asset classes whether it be equities, fixed income, FX or over-the-counter derivatives. They want to have a single blotter where they have their trading applications, P&L and risk management. They also want to be able to access liquidity in the most effective way and as quickly as possible. This consolidated, multi-asset approach I believe is the future of trading.
You joined ITG in 2011. What is the strategic priority for the company at this time, and what do you bring to the mix?
We believe many clients are looking for a single blotter user experience but they are not necessarily looking for one omnipresent solution. They want simplified and flexible workflows. We offer a wide range of different modules across the asset classes that we have built to interface with each other or different sellside firms because we are broker neutral. We are not trying to redefine the process but offer greater integration, transparency and control. We take clients through the entire life cycle of a trade starting with the ability to capture all the data for execution to transaction cost analysis (TCA) and straight through processing. Our order management and execution management systems are separate, although they can be tightly integrated through the trading blotter, and they are compatible with nearly all other major front-ends. This gives clients the option to choose the systems which are best for them rather than locking them into one system.
In terms of tools, one of the most promising developments today is in real time decision support. This provides clients insights into what is actually happening to their order versus their expectations and allows the buyside to react appropriately and trade on the venues that are best suited for their strategies.
What were the drivers behind your acquisition of RFQ-hub in August?
In many ways it is a chicken-and-egg story. When you want to move into a new area you have to find clients who want to consume the product, but they will ask how many brokers are involved. However, if you go to the brokers they want to know how many clients you have. RFQ-hub was an established multi-dealer platform which connects buy and sellside firms across exchange traded funds, OTC-negotiated equities, futures, options, swaps, convertible bonds, structured products and commodities. It fit our strategic vision and it will remain available as a standalone platform but will also be offered as module on ITG’s Triton execution management system.
What are your plans for RFQ-hub?
We did not see the acquisition as a cost rationalisation play but one where we can invest in the business and expand it globally across asset classes. We plan to roll out equity derivatives in North America in Q1 2015 and enrich the analytics by embedding our TCA within RFQ-hub.
What impact do you see regulation having on the industry?
Regulatory changes are the only constant in this business. They will continue to change the way people trade across all asset classes. Take the FX market; the dealing structure is evolving real-time to provide more transparency and disclosure. To that end we recently signed a joint venture with FX Connect, (State Street Global Exchange’s end-to- end, multi-bank foreign exchange platform). It provides foreign exchange liquidity from over 50 providers for spot, forward and swap transactions. We are marrying the back end of FX Connect with the front end of our Triton product which we believe will allow clients to execute FX seamlessly across multiple accounts unlocking workflow constraints and providing a multi-asset single blotter experience.
Who do you see as your main competition?
ITG covers every region and asset class and although we have competition in our different individual modules we see our edge as the ability to offer the full suite of products at a compelling price point that is tailored to each client’s requirements. For example, we are an agency broker with research, that has an alternative trading system, a network, OMS and EMS and a full continuum of TCA. We have many individual competitors, but very few true peers.
Will Geyer is Managing Director, Head of Platforms at independent execution and research broker, ITG. Globally responsible for ITG’s suite of Order Management Systems, Execution Management Systems, and connectivity products, Will previously worked on both the buyside and sellside of investment implementation. Most recently, he was CEO of JonesTrading and prior to that ran Citigroup’s global alternative execution businesses and managed equity trading at Barclays Global Investors.
© BestExecution 2015