One is the use of anonymous wheels for venue selection. Customers are particularly keen to show that they are monitoring real time execution quality, venue selection etc. We’re also seeing the concentration of flow with fewer providers. ZebrA-X is creating a hub for trading globally for the bank. We’ll be able to concentrate venue choice, algo choice and a high level of customer service in one location. We’re working with a number of brand new venues and innovators in the market to keep this current. The key for us is to differentiate ourselves from bulge.

When you put technology in the middle of a brokerage offering it tends to accelerate successes and therefore you’d expect the big to get bigger. The more a brokerage business looks like an exchange, the better it does. Much like you’ve seen with internet businesses from 20 years ago, you tend to get the weak ones withering away quite quickly. Due to commission wallets and equity issuance, the market’s extremely competitive so you’re seeing some fallout across different business silos, including electronic and low touch trading.

How are market conditions driving these low touch developments?

A couple of years ago, the goal was to capture retail and reinvent RSP mechanisms. Several banks and brokerages tried to do that. Clients we speak to – in particular wealth managers – are trying to cut costs. They’re doing that by electronifying the smallest 10% of trades. Big clients want to be able to interact or harvest that flow. If on a company’s results day there’s lots of retail sellers, some clients love to build a position by trading against retail because they have better information.

ZebrA-X has one OMS provider called Infront where orders go for three seconds all or nothing. If they don’t execute, those clients’ tickets then go to the RSP of the whole street. In that respect, we’ve disintermediated part of the RSP mechanism. The first bite of ZebrA-X algo goes exclusively to Aquis for 12 microseconds on an all nothing basis so if there’s an institutional order resting there, the retail order can cross at mid or better against that ticket before it goes off and checks all the other venues. Clients can do these kind of trades on a match basis in Aquis Auction on Demand (AOD) and then further down the life cycle of the ticket, a piece will rest firm in Aquis for the life of the ticket which enables us to hand on heart say you cross institutional to retail, retail to retail etc.

The more you electronify the business the more business you do. TCA – traditionally on which execution wheels are built – looks at three things: one is average fill size, two is pre-trade signalling and three is post-trade reversion. Typically, five seconds pre-trade and five seconds post-trade.

How are clients leveraging low touch offerings differently today?

Overarchingly customers want to do block business. They want to finish their tickets by the close of business. There will be some clients who’ll flash our dark aggregator with their tickets for a couple of minutes and then change the order into a benchmark algo. They’ll be some clients who’ll rest the block with us all day long and there will be some clients who rest fractions of tickets and work out where the liquidity is on a particular day, using it as a radar.

One of the key things we’ve done is to connect to systematic internaliser’s (SI) directly. If you can rest benign blocks of stock in certain SIs and get good fill rates you will get extended better liquidity down the road much like reputational scoring seen on Cboe or Turquoise Block Discovery does reputation scoring. There’s a move amongst us and our peers to connect directly to these bilateral SIs because customers want it. Customers’ overarching need is to do the block. They don’t want to miss the print on an exchange where they’re not represented.

We’re building proprietary tools with big xyt. Traditional TCA is T+1 so heads of trading look at execution quality from the day, week, month before. What we are building are live tools that we can drop and drag into the Bloomberg chat and say to the customer look have you thought about doing this with this ticket in order to get this outcome? For us, over the years we’ve seen lots of client chats become quite dormant. On the buy-side, some customers we speak to have hundreds of chats. For us to be relevant in an electronic space we have to have interesting content. If we can drag and drop a picture with what they should do for that particular order based on 20 days of geometric moving averages which big xyt have worked out for us, that’s extremely valuable.

How do you expect the low touch competitive landscape to evolve in the years to come?

Looking at the McLagan survey numbers for EMEA including UK, the low touch wallet has gone from around 30% to just under 40%. Therefore, having an electronic offering at the centre of a broader execution offering is really important. I’d say commissions have bottomed out on the low touch side and so going forward the way to win in the electronic space is really understand your customer. Customers want to see that you’ve got some academic rigour around your processes and your venue selection as well as a good commission rate even though you’re basically offering a high touch service at a low touch commission rate.

The roles of the traditional high touch sales trader and low touch electronic sales trader role are converging and people are talking about where blocks are traded and how they can optimise their outcome on a particular ticket. We’re going to be producing fortnightly research on what’s going on in the dark venue space. Separately we’ve engaged with another three innovation companies BPX Exchange which is waiting for its MTF licence, OptimX and OneChronos.

What developments are you seeing in commissions?

Large, sophisticated buy-side can build their own algo suite and they’re members all the exchanges so in order to make a new connection you have to stand out on several metrics. Two key metrics are venue reach and customer service. In flight analytics and unique wealth management and retail flow are also key. Typically, a big buy-side customer might have five bulge algo connections and then one or two spaces for companies like Investec where we’ve got an angle or differentiation along those lines. Given the high market share of the cash business here – just under 6% of the FTSE 250 – there’s decent resident flow sitting in ZebrA-X along with other wealth management flow which new customers can interact via our mechanisms.

If you rigorously control costs, you can still create profitable business on a standalone basis. Depending on how you negotiate with venues and exchanges is massively important. No one saying that margins are huge anymore but I’ve seen it done where you can run the business profitably on a standalone basis.

The post Fireside Friday with… Investec’s Dominic Lowres appeared first on The TRADE.

Greg Fortuna

The update is set to “allow clients to make more efficient and effective trading decisions using next-gen infrastructure,” said the firm. 

The move also includes a comprehensive rebranding effort, wherein GlobalLink Digital will be replaced by LINK, with State Street launching a ‘modernised’ visual identity. 

Speaking to The TRADE, Greg Fortuna, head of GlobalLINK, explains: “With the latest updates to GlobalLink’s open platform, LINK, we are excited to improve our client’s experience by introducing a refreshed and modern visual identity that brings together trading, analytics, and research solutions into a single, seamless digital environment. 

“This evolution reflects our team’s broader commitment to providing a unified and cutting-edge platform that helps empower our clients to succeed.” 

Key features of LINK include: a complete view of clients’ technology portfolios and workflows in one central system; access to around 700 buy- and sell-side entities through the integration of GlobalLINK’s suite of applications and third-party software; next-gen infrastructure.

“Investors are navigating increasingly complex regulatory and financial environments, making access to efficient and comprehensive trading solutions more essential than ever before,” said Tony Bisegna, global head of State Street Global Markets, in an official announcement. 

“By evolving our brand and launching LINK as our refreshed platform, we’re positioning Global Markets as the breakthrough edge our clients need to succeed.”

The post State Street unveils updates to its digital trading and FX platform appeared first on The TRADE.

Specifically, the diverse range of trading opportunities will be available to desks in US markets.

“By combining BTIG’s extensive trading capabilities with OptimX’s innovative platform, this partnership addresses the growing demand among institutional traders for advanced, centralised technology that enables seamless access to deep liquidity and high-quality execution,” said the firms in a social media announcement. 

Read more: Liquidity, it’s a two-way street

The news follows other recent partnerships with OptimX as the industry seeks to keep up with ever-accelerating technological innovation.

In January, OptimX Markets moved to expand its ability to offer institutional clients bilateral liquidity through an integration with State Street’s order and execution platform, Charles River. 

This partnership allowed OptimX to offer greater bilateral liquidity directly to the institutional buy-side directly via their systems – an alternative to going out into the lit markets. 

Later the same month, Winterflood Securities joined OptimX Markets’ growing sell-side network, able to access institutional buy-side trading desks in the European markets directly via OptimX’s platform.

Earlier this week,3 February, alternative trading system (ATS) PureStream also launched a partnership with OptimX Markets to collaborate to improve institutional trading workflows. 

“Collaborating with OptimX allows us to extend the reach of our streaming protocol, offering institutions incremental liquidity choices,” said Armando Diaz, chief executive of PureStream, at the time.

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Currently, government consultations are focused on plans for the wholesale consolidation of the local government pension scheme (LGPS) and defined contribution (DC) sector, while the defined benefit (DB) arena is remaining largely untouched. 

As these changes ramp up, the buy-side is set to reap more power when it comes to managing the assets, subsequently leading to an operational shift within organisations. 

Delving into the how, Mark Austin, pension and insurance executive, EMEA, at Northern Trust, highlighted that these reforms should eventually allow pools of LGPS and DC assets to become more self-determined in terms of the oversight of their managers and the oversight of their assets against their liabilities.

The ultimate end, Austin explained, is one wherein “the buy-side is going to start to get much more power and will ultimately potentially become a price-giver not a price-taker. 

“[This is] because, when they get to 100-200 billion, they can insource some of that capability that’s currently provided to them by some of the index managers by the employee benefit consultants, and they can actually take much greater control and take a much greater part in managing their assets.

“[…] That’s not something that’s going to happen overnight – consolidation and the government consultations always take ages, but behind the scenes, that consolidation is already happening reasonably rapidly in the DC and LGPS markets.” 

Read more: A deep dive into the ongoing UK capital markets reform agenda

Discussing in more detail what this could mean for the structural make-up of the buy-side in this area, Austin confirmed that there is potential for real change.

“It really depends on how those how those big asset pools structure themselves, but we can foresee certain areas in the future where an asset manager and a very large buy-side pool will collaborate on a bespoke index.

“That will enable them to differentiate themselves, because ultimately these big pools are going to end up in competition with each other […] We don’t see the future being how it is at the moment, wherein you issue a mandate, have a beauty parade, everyone submits their RFP and their price, you choose one and you’re off to the races. There’s going to be a lot more long-term collaboration between both sides.” 

John McCareins, head of international asset management at Northern Trust, further expanded that it’s important to not have an inward-looking methodology going forward and instead seek holistic solutions to the continued consolidation of pools.

“We don’t think about ourselves, we need to move away from asset management or asset servicing and really think how we engage with large, sophisticated investors as a problem solver.

“[…] There’s enhanced collaboration amongst our different groups and we’re jointly sitting down and saying how do we co-develop an integrated solution from investment design, through implementation, oversight, monitoring, reporting and all the analytics behind it.”

Those set to suffer most from this change are, understandably, the smaller boutique asset management firms which historically have had their success defined by winning ‘beauty parades’, added McCareins. 

“Now that beauty parade becomes less and less frequent and the discussion ends up starting in C-suite, there might not even be opportunity for you to compete in the future. Of course, it plays into some of our strengths, but that will change the makeup of the industry, and namely how boutique firms think about value proposition and strategy.”

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KCx’s expansion opens trading opportunities in the following countries: Dubai, Kuwait, Qatar, Abu Dhabi, Saudi Arabia, Oman, Bahrain and Egypt.

“In line with our commitment to expanding our global footprint and delivering on our new execution strategy, we are thrilled to announce our entry into the Middle East market,” said Chris McConville, global head of execution services and trading at KCx.

“The MENA region is a key growth hub with its dynamic economies, diverse markets, and increasing investor interest. By enhancing our presence here, we aim to better serve our clients and tap into the significant opportunities this region offers.”

The development follows the launch of new direct market access (DMA) capabilities in the Asia-Pacific markets, announced in December.

The launch enabled clients to execute orders using algorithms in Australia, Hong Kong, Indonesia, Japan, Malaysia, New Zealand, Singapore, and Thailand.

Read more: Kepler Cheuvreux launches Asia-Pacific direct market access

“At the core of our mission statement is a focus on creating products that our clients ask for. That’s why it was essential for us to go live across the [MENA] region with eight key markets from the outset,” added McConville.

The post Kepler Cheuvreux’s KCx launches MENA execution access appeared first on The TRADE.

Liontrust and BNY declined to comment when reached out to by The TRADE.

While it is not yet confirmed what the final agreement will be, it appears the setup will be focused on covering non-UK activity.

“As part of our ongoing commitment to enhancing operational efficiency, it is proposed to deepen our strategic relationship with BNY by using its Buyside Trading Solutions for our trading capabilities,” said Liontrust in a trading update released on Wednesday.

“This collaboration will allow us to extend our trading capabilities beyond UK trading hours and access more counterparties, with a solution that is scalable and with a partner that is investing heavily in its trading services to ensure that it remains cutting edge.”

Liontrust was awarded the Multi-Asset Trading Desk of the Year and Mid-Cap Trading Desk of the Year by The TRADE in 2022 and 2017 respectively. Liontrust’s multi-asset desk was also nominated for the Multi-Asset Trading Desk of the Year at Leaders in Trading 2024.

Read more – BNY’s Rebecca Crowe talks outsourced trading

Once finalised, the asset manager would join a growing list of firms that have turned to outsourced trading providers in the last 12 months to manage some or all of their trading activities.

Most recent was news in December that Avanza Fonder had outsourced to Northern Trust. In October, UK-based asset manager Artemis selected Northern Trust to provide outsourced trading services for its equities and derivatives activity, effective January 2025.

BNY itself won a major deal in March 2024 when it agreed to deliver Goldman Sachs Asset Management global trade execution services in EMEA, the US and APAC markets across fixed income, FX, derivatives and ETFs. 

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Named TT Broker Scorecard, the new offering will publish a monthly report ranking global and regional equity brokers by their liquidity and execution quality.

The system is based on trade data compiled by Abel Noser Solutions which TT acquired in 2023.

Read more – Trading Technologies completes acquisition of Abel Noser’s START

It will be available via the Abel Noser transaction cost analysis (TCA) solution, Trade Zoom.

TT said the solution will allow buy-side participants to “identify and vet” brokerage firms that trade in specific market segments. Sell-side clients can analyse their own competitive strengths and areas for improvement.

“In today’s ultra-competitive environment, the buy-side is increasingly trying to find liquidity in highly concentrated markets, while the sell-side is seeking ways to protect and grow market share,” said Peter Weiler, EVP managing director, data and analytics, TT.

“Our buy-side clients can find the counterparties that are most active in specific regions, countries, capitalisations, sectors and other segments. Sell-side brokers can identify and promote where they offer the most liquidity while establishing where they should focus on growing, leapfrogging competition or maintaining market share.”

Abel Noser took home the award for TCA Provider of the Year at The TRADE’s inaugural Leaders in Trading New York Awards in November last year.

The post Trading Technologies launches new equities broker ranking system appeared first on The TRADE.

The liquidity provider will now be able to access institutional buy-side trading desks in the European markets directly via OptimX’s platform.

“Winterflood is delighted to be working with OptimX,” Scott Lesser, head of trading solutions, Winterflood Securities, told The TRADE.

“Through the seamless technology streams of OptimX and transparent liquidity of Winterflood, this collaboration between the two firms will enable enhanced productivity and trading opportunities for our institutional clients.”

OptimX Markets is an institutional liquidity management platform. The platform is designed as an extension of buy-side trading workflows with the aim of expanding their access to actionable sell-side liquidity in increasingly fragmented European markets.

Read more – OptimX connects with Charles River to offer institutional clients bilateral liquidity

The platform aims to centralise “depth and breadth of liquidity provider flow” to help streamline buy- and sell-side interactions. Confirmed OptimX Markets sell-side partnerships include Liberum, Peel Hunt and BMO Capital Markets.

 “Winterflood Securities provides exceptional liquidity and execution services,” Peter McStay, head of EMEA at OptimX, told The TRADE. “We are excited to collaborate with Winterflood, who bring to the OptimX community a diverse and broad supply of quality block liquidity.”

The news follows an announcement by OptimX earlier this week that it had partnered with order management system Charles River in order to expand its capabilities in offering bilateral trading to buy-side users.

The post Winterflood Securities joins OptimX liquidity provider pool appeared first on The TRADE.

Market consolidation versus liquidity fragmentation will be a point of discussion into next year. The Swiss Exchange Group acquisition of Aquis will be an obvious one to watch, while in contrast, there are a slew of new liquidity opportunities expected to go live in 2025. However, the jury’s out on whether further fragmentation is needed given the continued squeeze in order book liquidity and/or whether the market has the capacity to connect as internalisation continues to take priority for many.   

Next year could see the re-emerging debate around shorter trading hours ratchet up, which contrasts to the 24-hour trading agenda in the US. Separately, conversations are likely to continue in support of single regulatory framework for Europe. 

The selection procedure for the European equities tape starts next June, with a decision made by the end of 2025. Hopefully the UK will also announce their views on an equities tape next year. September will see Europe ban payment for order flow and introduce a new 7% single volume cap for dark trading. Otherwise, focus must be on making equities markets more transparent and less bilateral to attract international investment and prevent further primary issuance leaving these shores.

Joe Collery, head of trading, Comgest 

I feel the biggest trend in 2025 will be redefinition of the roles of ELPs [electronic liquidity providers]. Market participants continue to lament the inadequacy of liquidity in continuous market trading which will lead to shift in how ELPs provide their liquidity to fill this perceived gap.

Jo Burnham, risk and margining SME, OpenGamma

Predictions are a tricky business. Three years ago, would many people have predicted that Donald Trump would be returning to the Presidency in early 2025, with long-term wars raging in both Europe and the Middle East? Investors have learnt that they need to expect the unexpected, which is why liquidity risk management practices are now so important.

I see this being a big theme for market participants next year – ensuring that they are operationally resilient. Being able to navigate margin requirements and optimise the ways that they are met is so important in a volatile geopolitical environment, which inevitably permeates through to financial markets.

Bjorn Sibbern, global head of exchanges, SIX Swiss Exchange 

In 2025, the challenge for European primary markets will be creating an investment environment that fosters innovation while attracting global IPOs, not just competing for regional dominance. On the secondary markets front, liquidity fragmentation remains a pressing issue. 

By the end of next year, exchanges will need to have made significant strides in venue innovation, not only to retain institutional flow but also to foster greater retail participation. Short and sharp bouts of market volatility, as we saw this year with the global equity sell-off in August, could also shape the trading landscape. This is why exchanges must evolve with smarter tools and deeper liquidity to remain the trusted platforms for price discovery. 

Matt Clarke, head of distribution and liquidity management for EMEA, XTX Markets 

In 2025, we expect five or more ELPs [electronic liquidity providers] to offer actionable liquidity directly into the major EMS platforms and the Reactive Markets network across EU and US equities. It is entirely possible we’ll see one or more banks extend similar offerings to select clients. Our preferred approach involves a broker in the middle, allowing buy-side firms to outsource ELP onboarding and benefit from aggregated prices in competition. This model enables liquidity providers to offer tailored liquidity and collaborate with end-clients. 

The exact form of this workflow is still developing with the buy-side playing a key role in shaping it. Successful solutions will have low onboarding friction, work for both automated and click trading, and aggregate all liquidity sources in one place. This aggregation of liquidity will drive fierce price competition, leading to better trading outcomes.  The potential rewards of this workflow are increased size and mid presence, resulting in measurably better execution quality. As always, results are what will drive long-term adoption.

Keep an eye out for further predictions unpacking all corners of the market published by The TRADE in the coming weeks!

The post The TRADE predictions series 2025: The liquidity landscape appeared first on The TRADE.

Bobbie Port

Following the launch, clients can execute orders using algorithms in Australia, Hong Kong, Indonesia, Japan, Malaysia, New Zealand, Singapore, and Thailand.

Kepler said the development marked a significant step forward in its “global execution strategy” in an update on social media.

“KCx has long established its presence in both high-touch and program trading, and to continue driving innovation and disruption, it is essential to offer a full suite of services globally,” Bobbie Port, head of electronic distribution at KCx told The TRADE.

“Today, we are proud to announce that we have achieved this milestone by successfully deploying algorithms in the APAC region.”

Port assumed his role as head of electronic distribution in 2022 after joining Kepler in 2011. He has had an extensive career in electronic trading sales, with his most recent role previously to Kepler focusing specifically on direct market access and algo execution sales at Instinet.

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