Paul Humphrey

The latest funding round included Optiver as lead investor, with co-participation from existing investors FactSet, Nasdaq Ventures, IQ Capital’s Growth Fund, as well as additional investment from CTC Venture Capital.

As part of the move, Optiver has also joined BMLL’s board of investors. 

The investment comes at a time of continued accelerated growth for BMLL. Over the last 18 months, the business added more than 40 equities and futures datasets globally and today covers 98% of the MSCI All Country World Index.

BMLL has also grown its global footprint, opened a US-base and increased its client roster.

“We are thrilled to welcome Optiver as a significant shareholder and are delighted to have the ongoing support from our existing investors who have backed the latest round,” said Paul Humphrey, chief executive at BMLL.

“We have an incredibly diverse team of supporting investors, with deep-seated global market and technology expertise, and we are poised to scale the business further, as we build out and scale our data feed business and futures coverage and wider product offering globally.”

Read more: BMLL expands kdb+ database offering with INQDATA technology partnership

This investment follows BMLL’s Series B round in October 2022, which secured a $26 million strategic investment from FactSet, Nasdaq Ventures and IQ Capital’s Growth Fund. Snowflake Ventures joined the Series B round in September last year.

BMLL has previously raised $36 million through Series A and seed funding rounds.

“The high quality of BMLL’s data, their advanced analytics tools and their best-in-class team have together significantly improved our ability to generate insights that influence our strategies,” said Pat Cooney, managing director at Optiver Europe.

“We believe these benefits can extend beyond our firm and provide substantial value to other market participants as well.”

The post BMLL secures $21 million injection from Optiver-led investment round appeared first on The TRADE.

This landscape has experienced notable evolutions in recent years due to advancements in technology, increased market participation, and regulatory changes. An understanding of the current liquidity landscape allows traders to optimise their strategies, manage risks more effectively, and make informed decisions in both stable and turbulent market environments. The topic of liquidity and its shifting dynamic has been a key theme amongst the industry at various conference held over the last few months.

Read more: Combating liquidity challenges in Europe requires caution especially when considering alternative means of trading

Speaking to The TRADE about key themes in this space, Mark Montgomery, head of strategy and business development at big xyt, notes “We’ve had the change in the RTS 1 and 2 OTC trade flags. That as a comment sounds dull, but is actually significant beneath the surface; what’s actually happened is with the FIX community getting involved and the regulators listening, they’ve got rid of a lot of the noise that made-up non addressable volumes in the marketplace.

“The big thing about that is the trades that are going on off-book, off-venue, off-exchange and are not contributing to price formation – i.e. it’s noise, it’s synthetic trades or it’s not actionable or addressable – we’ve seen evidence of a big decrease in that and we’ve also seen within that, some more specific and better flagging of trades that have particular characteristics.”

Montgomery went on to add that benchmark trades, which might be a program trade benchmarked to something or a trade that was a bit vague beforehand, are experiencing more specificity around the flagging and the reduction in noise.

“One of the challenges within all of this is you can see percentages swing. Because OTC was so big, it makes the growth in some of the other mechanisms maybe look disproportionately large, but in value terms, we’re going to have to look a little bit deeper and see what it means for the subcategories,” adds Montgomery.

Electronic liquidity providers

Another key theme highlighted by Montgomery is the bilateral liquidity provision being offered by electronic liquidity providers. He notes that these providers “were previously providing liquidity to the markets in a way where they interacted with the exchanges and they were known to certain people in the community, but not everybody. However, today, we see ELPs more active and vocal about their provisions and what they offer.”

Speaking to The TRADE about the evolving nature of ELPs in relation to the buy-side, Anish Puaar, head of European equity market structure at Optiver, adds: “We’re seeing more interaction between buy-side firms and ELPs in equities, be that directly or via SIs. The liquidity on offer from ELPs is another channel that the buy-side can look to use alongside other execution options.” Optiver currently connects directly to the buy-side via execution management systems (EMS).

“As with all participants, we believe it is important for ELPs to be open and transparent about how they provide liquidity. As buy-side-to-ELP interaction grows, it’s important to make sure the nature of these interactions is well understood,” says Puaar.

Reporting

Elsewhere, Montgomery discussed the nature of reporting from ELPs in relation to the SI mechanism. “It seems like ELPs are not necessarily reporting their trades in the way that we expected, which is through the SI mechanism, because it would seem to be systematic and a risk price. But actually, they’re doing it through a waiver through off-book (on-exchange) in certain cases,” he says.

What this means is there’s an interesting shift in risk provision and risk transfer in the marketplace.

“If I’m a buy-side firm and I want to suddenly trade, rather than trading agency through a vanilla VWAP algorithm, I’m suddenly trading on risk,” adds Montgomery. “This could either be in a block or throughout the day with a risk counterparty where I’m giving away a little bit more information to somebody who can do more in terms of price movement, in terms of access to other markets and other venues with that information and with that flow.”

This could ultimately result in a shift which could be taking place away from the bank risk desks and into the ELP risk desks. Montgomery explains that that is “something that the banks will be watching very carefully, and I think it’s something that the ELPs will be looking to see how they manage that risk.”

The post Regulation and fragmentation’s influence on the current liquidity landscape appeared first on The TRADE.

Double volume caps (DVCs) were deleted as of 28 March in the original Mifir text published in January. However, the previous text only authorised the enforcement of the SVC [single volume cap] in 18 months’ time – leaving an unintentional window with no caps thanks to the clerical error. Brussels subsequently began exploring possible ways to close the loophole in the new share trading rules. In the last days of March, the European Commission subsequently rushed through a last-minute draft revision to its Mifir text to plug the loophole, keeping the DVCs in place until the implementation of the new single volume cap.

The regulator’s mistake and subsequent decision to fix it has re-sparked an existing discussion around why watchdogs are focusing their attentions on micro changes to regimes and not on the wider issue around low volumes in Europe – especially when the result has little to no impact on the markets. 

Dark trading became the poster child of post-Brexit regulatory discussion in the UK and Europe, with the Bloc championing lit transparent trading throughout. The DVCs regime included in the January Mifir text had followed more than six years of deliberation over the desired cap on dark trading in the Bloc, with the European Commission and Parliament finally settling on the deletion of the 4% and 8% caps in favour of a single cap of 7%. 

“In my opinion, the last-minute decision [in March] wasn’t a surprise as it’s been clear from the beginning of Mifid II that politicians and regulators across Europe are committed to the DVC mechanism,” Evan Canwell, equity trader and market structure analyst at T. Rowe Price, tells The TRADE.

An unintended experiment 

Without the clarification, ESMA had the opportunity to stop enforcing DVCs until Q4 of next year. Had the last-minute changes to the text not come through, Europe would have found itself taking part in an unintended experiment to test how far dark trading could go if left uncapped. 

“While I think it’s unlikely that ESMA had ever planned to stop enforcing the DVC mechanism during this period, it would have been a fascinating opportunity to observe the shift in market dynamics without any artificial constraints on dark trading,” adds Canwell. “This would also have allowed market participants and regulators to engage in discussions on both the optimal thresholds and the appropriateness of any future dark caps, in a fully data-driven manner.”

Following reports of the loophole in early March, participants and venues in some cases had begun to put in place contingency plans should dark trading be left uncapped. Those most vocal against the use of dark caps during the European regulatory discussions came from the buy- and sell-side, with many suggesting the new single cap of 7% was arbitrary and querying how the watchdog had reached this conclusion. Many were therefore keeping close tabs on the saga in March, watching the events unfold in the hope that what they considered an unnecessarily complex detail might not come to fruition.

“There was a genuine hope that there could be an opportunity for those caps to be repealed. I suppose intuitively you would expect a certain level of disappointment on a number of levels,” says James Baugh, head of European market structure at TD Cowen. “One is that we found ourselves in this position, but also perhaps that there wasn’t a willingness to use it as an opportunity, to provide that chance to see what would happen without the caps in place.

“If this was a mistake in the drafting, it would clearly take some courage to roll the dice to see what would happen if the caps were lifted for that interim period.”

The reality is that other regions where dark trading has been left uncapped have not seen the segment grow out of control. In fact, the US, which doesn’t enforce caps, and the UK, which ditched caps post-Brexit, have both seen dark trading reach a certain level and then plateau. In the UK, dark trading has peaked at around 13% of monthly traded volumes on exchange since removing its caps. Meanwhile in Europe, stocks are rarely close to the DVC thresholds. 

“When we look at the double volume cap regime, it’s not like we’re seeing those European markets buffer at those levels,” adds Baugh. “It’s not like dark trading has got to those levels and therefore, it’s constrained at those levels. That’s not the case at all. If anything, the data would show you that it’s trading a couple of percentage points below those current levels.”

The market has evolved towards other forms of execution in light of the caps on dark trading, meaning a significant shift to dark venues is more than unlikely. 

“There are a large number of well-established alternative venues (such as periodic auctions) which allow for trading in a ‘dark-like’ manner and have been firmly embedded in routing logic across Europe,” adds Canwell.

Why is it then that we have seen two major primary exchanges move to launch dark books in the last few months when it was those exchanges that were most against removing caps on dark trading during Mifid discussions? Both Euronext and Deutsche Börse have set their sights on dark trading in the last year. Euronext confirmed in May 2023 that it was set to launch a dark trading service. The service went live trading in March but has seen slow uptake as of yet.

This news was followed by rival exchange Deutsche Börse announcing own its plans to develop a midpoint trading functionality in March earlier this year. The new functionality has an envisaged launch of November. Known as ‘Xetra Midpoint’, the functionality is a customer-driven project according to Deutsche Börse and will be integrated into the Xetra market.

The events around the DVC correction when laid alongside the recent launches paint an interesting picture and begs the question: what is Europe trying to achieve? Europe as a region is one of the most fragmented markets to trade with three times the number of exchanges as the US, 10 times the number of listing venues and 20 times as many post-trade providers.

Central to many panels at recent events is the level of fragmentation Europe has reached alongside its comparatively low volumes to the rest of the world. While fragmentation is essential to competition, it can go the other way and harm markets by causing investors to widen the prices they show and reduce their size.

Speaking at a recent Bloomberg Intelligence event which explored ‘liquiditiy in transition,’ Eleanor Beaslety, COO, equity execution, Goldman Sachs, said: “Innovation is great and if something has a USP that brings more volumes into Europe, that’s great. What we don’t need is more of the same. There are a number of dark books. The interesting thing with primary markets is potentially they have unique liquidity in regions that are very national so that could lead to more liquidity coming to the fore. Where it’s just another venue, it’s expensive and it’s another overhead.”

Moving from a micro focus to a macro one

With volumes in Europe on a continuous decline – seen most drastically on the lit continuous order books – it forces participants to question whether or not regulators are focusing on the right areas, with many participants suggesting we should zoom out from these time-consuming micro debates and assess the wider macro landscape to support growth in Europe. 

“We’re rarely in a steady state with regulation. We implement something and then months down the line we’re looking to change it,” said Anish Puaar, head of European equity market Structure at Optiver, also speaking at Bloomberg’s event.

“It’s every time something is introduced – e.g. DVC or SI thresholds – and this tinkering with micro aspects takes up a lot of time and doesn’t have any meaningful change in the market. Europe’s problems are much bigger than that.” 

Volumes have indeed become increasingly segmented and internalised in light of the challenging volume environment in Europe. Alongside volumes executed by systematic internalisers, the bilateral and negotiated trade segments have also grown exponentially. This is where many suggest regulators should be focusing their attentions. 

“That’s the bigger macro picture, not squabbling over the double volume caps,” says Baugh.

The UK is now bringing in new requirements in May that will transform the way firms tag trades and subsequently report them, shedding more light on volumes and liquidity taking place off exchange. However, a slight hinderance to this is that the UK and Europe have once again opted for ever so slightly different regimes. 

“If we could flag OTC trades and get consistency across the UK an EU it would go a long way to solving a lot of what the consolidated tape is supposed to be doing,” added Rupert Fennelly, head of electronic trading sales and coverage, Barclays Investment Bank, also speaking at Bloomberg’s event.

The events of the last few months have exacerbated a desire from participants to see their appointed regulators re-focus their attentions on core structural issues surrounding Europe’s trading landscape. As a region, Europe must turn its attention away from the small and arguably arbitrary fixes in favour of a resolution to the larger issues at hand.

“We need to have some tougher conversations that might be politically difficult such as simplifying post-trade. That would be a much more meaningful debate than some of the tinkering we’ve done over the last 10-15 years,” concluded Puaar. 

The post The dark trading debacle – does anyone even care? appeared first on The TRADE.

The burgeoning relationship between the two sides demonstrated by this insight was an almost unheard-of phenomenon a decade ago, prior to the introduction of Mifid II in 2018.

Ben Smith

Speaking to this trend, one global head of trading at a large French asset manager respondent to the survey asserted that this activity represents an initial step in a longer journey: “The trend [of trading directly with market makers] started specifically in the ETF market but our goal is to develop step-by-step in other assets like options, bonds.”

Read more: Buy-side agrees market makers will lead ‘new era’ of liquidity

European equity volumes have been stagnant in recent years. In 2023, traders saw little in the way of improvement of liquidity conditions – the average daily value traded fell 16% from 2022, the lowest in a decade. 

With this in mind, Evan Canwell, equity trader and market structure analyst at T. Rowe Price explains: “With lower volumes across Europe, it’s not surprising to see buy-side firms establishing direct bilateral relationships with market makers, especially in the area of systematic, cashflow trades containing no / low investor alpha.”

Broker lists growing

However, the survey also found that despite these low volumes there was also noteworthy, and arguably surprising, developments in the broker space, where 40% of respondents confirmed plans to increase their cash-equity broker lists over the next 12 months.

While 36% of those surveyed responded that they expect their cash-equity broker list to stay the same over the same period, just 24% stated that they foresaw a decrease.

Delving into this, size understandably played a role. While most firms confirmed they keep between 10-20 firms in their broker roster, 30% of the largest buy-side firms trade with more than 50 counterparties. 

Following the introduction of Mifid II the market saw a reduction in broker lists, with one study at the time reporting that more than half of UK fund managers reduced the number of brokers they engage with, within just four months of the new regime. However, this approach is demonstrably no longer the state of play. 

Read more: MiFID II sees more than 60% of UK-fund managers reduce broker lists 

Echoing this in his response to the survey, Ben Smith, head of trading at Independent Franchise Partners, stated: “Thinking back to Mifid II, we expected to shrink our broker list a little once the dust had settled. In truth, that never really happened, and, if anything, the list has grown modestly. 

“On the electronic side, we’ve found that brokers have their own niche when it comes to liquidity seeking, dark aggregation, and interacting with the close. In terms of high-touch, liquidity has become so challenging in Europe that having more connections and options is now vital.”

Trading strategies evolving

Elsewhere, The TRADE and Optiver’s report unpacked changing trading strategies in the face of a 35% decline in the volume of trading on displayed markets. As a result, more trading occurred in dark pools, periodic auctions and off-exchange markets, the survey found. 

The report explains that lower overall volumes coupled with subdued volatility is likely to have contributed to the decline in lit volumes. 

Traders become increasingly concerned around causing market impact by exposing orders to lit venues during quieter market periods, leading many to opt for dark markets or bilateral liquidity sources.

Amidst this landscape, traders identified implementation shortfall (IS) as their preferred benchmark, with two thirds of those surveyed confirming it is used “fairly often” or “most frequently”.

These findings show a clear market preference for IS as it has continued to slowly but surely overtake VWAP as the benchmark of choice. In addition, the close has seen significant growth, due in large part to the increasing number of passive funds that use end-of-day prices as a benchmark.

Among the key buy-side trends explored in the survey conducted by Optiver and The TRADE was the development of more advanced transaction cost analysis (TCA). When asked what impact improved execution analytics would have on the trading desk, 81% stated that it would have ‘some’ or ‘significant’ positive impact.

Read more: A TCA wish list for the buy-side

Specifically, The TRADE’s survey found this especially true when it came to real time TCA, a key industry talking point over the last couple of years. Almost 35% of buy-siders highlighted that real time capabilities would most improve their transaction cost analysis processes, closely followed by almost a third who highlighted the importance of an increase in the number of data points. 

Market structure concerns

On the topic of data, there’s of course a lot to unpack across the buy-side, with the survey finding that data fees and consolidated tapes (CT) top the list of market structure concerns. 

Specifically, when asked which market structure and regulatory topics would have the most impact on their firms, a third of the buy-siders responded that lower market data costs would be most impactful, followed by almost 50% who highlighted the CT.

There has been a historical lack of a consolidated data source in market, alongside a monopolistic environment when it comes to venues and execution platforms. Owing to this, buy-side firms have regularly been charged high fees for valuable transaction data – to which they have contributed – essentially paying to buy back their own data. One answer to this problem is of course the hotly debated notion of a consolidated tape. 

The European Securities and Markets Authority (ESMA) expects to authorise a consolidated tape provider for bonds in 2026, while the UK Financial Conduct Authority (FCA) has effectively met its commitment to have a regime for a CT in place by this year.

The consolidated tape issue, on both sides of the Channel continues to be analysed, however the emerging consensus appears to be that, in the end, together is better.

As Smith explained: “We think that Europe would benefit greatly from a consolidated tape. Foremost, it would serve as baseline and help to democratise access to market data. Importantly, it would make Europe appear more as ‘one market’, hiding away some of the complexity of its market structure that has become anathema to global investors.” 

Read more: If you build it, will they come? Does data hold the key to a healthier market?

“The topic around the consolidated tape makes sense for us and we consider that it’d be helpful to enrich any database, to increase transparency and to capitalise on this to deploy more robust AI models around execution,” added a global head of trading at an undisclosed large asset manager. 

The TRADE’s European cash equity trading survey included insight from 225 buy-side traders, including a significant number of active asset managers and private banks. 

The post Relationships between the buy-side and market makers look to be solidifying in the face of low volumes, survey finds appeared first on The TRADE.

The three firms join a growing list within Sustainable Trading’s global membership network of investment managers, banks, brokers, exchanges, trading platforms and service providers who share the goal of improving the sustainability of global markets.

Members of the network are now making progress with the implementation of the Sustainable Trading Best Practices, Sustainable Trading confirmed, through which the associated measurement framework will be utilised by members to track their progress and benchmark themselves against their peers.

Watch now: Sustainable Trading’s Duncan Higgins on integrating ESG into trading

The addition of Exegy, ING and Optiver follows the recent appointment of Eleni Coldrey of Euqinix, Asha Patel of Instinet and Ebrahim Patel of RMB, to Sustainable Trading’s board.

“We are delighted to welcome Exegy, ING, and Optiver to our membership network. Their extensive experience of global markets, and common commitment to driving a more sustainable future for the financial industry, will bring invaluable insights to Sustainable Trading,” said Duncan Higgins, founder and chief executive at Sustainable Trading. 

“Their participation further strengthens our collective efforts to drive positive industry change and greater sustainability in the global markets trading industry.”

The post Exegy, ING and Optiver become latest members to join Sustainable Trading appeared first on The TRADE.

The addition of Optiver marks a significant milestone for the partnership as it becomes the first market-making company to join as a full member.

Plato Partnership stated that one of its core missions for 2023/24 is to broaden its horizons with the aim of hearing, considering and representing a wider array of market participants.

Adding Optiver will help represent the diverse interests of all market participants alongside fostering innovations to improve the overall market experience, according to Plato.

“As part of our mission to improve markets, we proactively seek to share our knowledge and expertise as a way of driving progress throughout our industry,” said Jan Boomaars, chief executive of Optiver.

“A leading forum for open discourse and debate on financial markets, the Plato Partnership is a natural venue for Optiver to continue this work.”

Optiver is set to appoint a representative to join Plato’s advisory committee, will actively engage in and contribute to the MI3 academic initiative, and become a valuable member of the Plato Turquoise Expert Group (TPEG).

“We are thrilled to welcome Optiver to Plato Partnership as our first market-making member. This collaboration aligns closely with our mission to foster a diverse and dynamic set of voices as we look to innovate the equity market,” said Mike Bellaro, chief executive of Plato Partnership.  

“Optiver’s inclusion not only expands our membership base but also injects a new kind of expertise and innovation that will undoubtedly benefit not only our advisory committee and initiatives, but all market participants.”

Earlier this year, Plato Partnership added Liquidnet as an inaugural strategic partner, which followed the addition of Kepler Cheuvreux, UBS Asset Management and Pictet Asset Management as founding members late last year.

Elsewhere, Capital Group’s Simon Steward was appointed buy-side chair of Plato Partnership, replacing Christoph Hock, head of multi-asset trading at Union Investments, in October.

The post Optiver becomes first market maker to join Plato Partnership as full member appeared first on The TRADE.

New to Leaders in Trading 2023, this category is designed to recognise those firms and individuals going above and beyond to service and support their clients in light of the numerous regulatory and market structure overhauls taking place across the globe.

Post-Brexit, divergence continues to play a part in the regulatory regime in the UK and Europe, while other major shifts such as the transition to T+1 settlement in the US are likely to significantly impact the way institutions operate.

In light of this, The TRADE has selected Goldman Sachs, Optiver, RBC and TD Cowen for the 2023 shortlist, following their efforts over the last 12 months. 

Goldman Sachs

Over the last 12 months, Goldman Sachs’ market structure and regulatory team, spearheaded by chief operating officer for EMEA equity execution services, Eleanor Beasley, has continued to provide thought-leading content in the context of market structure changes in the EU and UK. Whether that has been covering consultation papers that continue to come from the UK and the EU, or highlighting changes in exchange offerings or migrations, the investment bank has provided insights on what it believes the impact is going to be and what is going to happen to the broader liquidity landscape as a result.

Alongside helping its clients to make sense of regulatory regime changes in Europe and the UK, Goldman Sachs has produced deep dives into regulatory updates and launched a new quarterly market structure podcast – ‘Evolving Equities’ – in which Beasley hosts a new external guest each episode. The quarterly content aims to provide clients with insights to better understand and navigate the equities landscape. Other regular content by Goldman Sachs includes weekly liquidity colour, monthly liquidity analysis, quarterly cost to trade analysis and quarterly developed vs emerging markets liquidity deep dives.

Goldman Sachs’ market structure team works as part of a broader team within the investment bank, including the quant analysts and its SOR strategy team to ensure that market structure and information received from regulators is an integral part of its broader liquidity strategy. 

Optiver

With former TRADE reporter and Rosenblatt analyst, Anish Puaar, at the wheel, non-traditional liquidity provider Optiver has made a significant push into the thought leadership sphere in the last 12 months, aiding both its own counterparties and firms across the wider market in their understanding of the shifting market structure and regulatory landscape.

In the last year, the market maker has published whitepapers and spoken at industry conferences on a variety of topics including: the “anti-competitive nature” of single market-maker exchanges, the benefits and risks of Europe following suit with the US in the pursuit of T+1 settlement, the international financing review (IFR), closing-auction outages and market-maker protections in the options market. As well as the history and uses of short-term options, capital markets recommendations for incoming EU policymakers and the Asia-pacific equity options markets.

The market maker has also introduced a quarterly market structure newsletter for trading counterparties, highlighting statistics like liquidity and trading spreads across cash equities trading venues, and published comment letters on Securities and Exchange Commission (SEC) equity market structure proposals. Optiver is committed to voicing its opinion in industry bodies and at industry forums and conferences. Subscribers to the market maker’s Insights email list are up 39% this year, Optiver confirmed.

RBC

Headed up by global head of market structure, Rich Steiner, with consultants on the ground in Europe such as former TRADE editor, Hayley McDowell, RBC’s global market structure team provides insights and content on key themes and trends to assist clients with their execution processes and decisions. They produce monthly recaps, key development notes and in-depth reports on market structure themes which are distributed regularly to clients, as well as curated content on client request.

The team collaborates closely with product to develop the algo suite and logic based on regulatory, liquidity and other market structure changes to improve performance, reduce costs and increase efficiency for its clients. Current themes of focus include liquidity shifts, AI and machine learning, T+1 settlement, upcoming changes to Mifid II research rules and market outages.

Earlier this year, RBC’s Digital Solutions and Client Insights (DSCi3) business expanded Aiden, its proprietary AI-based electronic trading platform, into Europe. The tool is designed to reduce slippage against the volume weighted average price (VWAP) benchmark while minimising market impact. According to RBC, it’s market structure team played a key role in Aiden’s implementation by ensuring the algorithm leverages the nuances of the European trading landscape and informing clients of Aiden’s capabilities and logic with the product and coverage teams.

TD Cowen

TD Cowen’s market structure offering is spearheaded by former Citi, LSEG and Turquoise alumnus James Baugh, now head of European market structure for the firm. TD Cowen, part of TD Securities, aims to put market structure at the core of its electronic trading business. The market structure offering provided by the institution is a “linchpin for liquidity strategies and a driving force behind its distinctive algorithmic trading offerings,” TD Cowen told the TRADE.

The TD Cowen market structure team provides opinions and insights into regulatory and market structure changes, adding depth, perspective and practical value by illustrating how these changes directly affect day-to-day business. The firm also regularly distributes notes and updates to the buy-side community. These updates cover a wide range of topics, such as the implications of diverging regulations post-Brexit, the re-bundling of research, the ban on payment for order flow (PFOF), primary market outages and data centre moves.

Actively engaged in discussions on key topics impacting the industry, TD Cowen participates in most major industry forums and conferences, reaching markets across the continent and as far afield as South Africa. Its involvement with Q15, where James Baugh serves as an advisor to the Equity Quorum, emphasises its role in shaping industry dialogue.

The post Leaders in Trading 2023: Meet the nominees for…. Sell-side Market Structure Excellence appeared first on The TRADE.

Over the last year, the liquidity landscape has continued to develop, with players continually innovating their offerings and growing their teams to better meet client needs.

Among the key players in this competitive landscape, The TRADE has selected Citadel Securities, Optiver, Virtu Financial, and XTX Markets for the 2023 shortlist, following various individual achievements by these businesses over the past year. 

Citadel Securities 

Needing little introduction, Citadel Securities, is one of the largest market makers in US Treasuries and USD interest rate swaps globally, and serves an extensive list of financial institutions, including: banks, asset managers, pension funds, hedge funds, central banks, and sovereign wealth fund. Its focus is to provide investors with the liquidity needed to trade equity and fixed-income products in any market condition.

Over the summer, Citadel Securities entered into the credit sphere amidst technological advancements, offering US investment-grade bond trading to clients as of June. Speaking at the time, head of fixed income ETF trading, Bob Cariste, highlighted that the initial focus for the business was on investment-grade (credit) due to the fact that that is where the greatest overlap exists with Citadel’s existing fixed income business.

The firm is active across more than 55 markets, with $440 billion in trades executed per day. Last August, the business opened its Tokyo office, continuing its global expansion in the region – offering US fixed income products to Japanese institutional investors. The firm’s growing global footprint now includes 15 offices across North America, Europe, and Asia Pacific.

Optiver

Optiver has gone from strength to strength in recent years, developing a unique European cash-equity franchise thanks to its expertise in options and ETF market making. Over the last 12 months, the business has grown its client roster, establishing cash-equity trading relationships with various entities including: asset managers, sovereign wealth funds and private banks. Optiver’s approach is to give institutional asset managers access to liquidity from its central risk book.

Optiver’s net trading income in 2022 saw a 42% year-on-year increase, with a total equity of €3.6 billion compared to € 2.8 billion the previous year. Optiver’s market structure team actively monitors developments among exchanges, custodians, industry groups, and policy makers in order to formulate the business’ stances. The firm also regularly publishes whitepapers and shares insights on market structure and regulation, recently sharing insights around: T+1, IFR/D, key options considerations, EU and US policy, and venue functions.

In March, Optiver was the lead investor in the equity funding round for the launch of the MEMX Options exchange. As part of its commitment, the business confirmed it would assume a MEMX board seat, as well as chairmanship of a newly-created Options Market Structure Committee. In September, the electronic market maker selected Philippe Rizzo to join its institutional sales team, with his role focused on cash equity sales in France, Belgium, Luxembourg and Switzerland. Rizzo joined from Instinet, where he previously served as a global equity sales trader. The same month, Optiver took a further step in its US expansion plans with the opening of a new Chicago office, an increase of over one-third from the firm’s previous footprint in the city. 

Virtu Financial

Global market maker Virtu Financial has had a stellar performance over the last 12 months with a high number of business updates across various areas as it enhanced its offering aimed at creating more efficient global markets. Virtu’s product suite includes offerings in execution, liquidity sourcing, analytics and broker- neutral, multi-dealer platforms in workflow technology. It operates across Asia Pacific, Canada, EMEA, and the US.

In August, Virtu entered into a strategic alliance with InvestorLink to integrate order management and AI-based matching platform with Virtu’s infrastructure to offer retail investors better access to the primary markets. In June, Virtu upgraded its POSIT Alert block trading capabilities to include automated dark liquidity seeking in a bid to tackle fragmentation in the non-displayed markets. Named Alert+, the solution aims to give traders an increased opportunity to execute any residual and reduce execution risk by sourcing incremental dark liquidity and completing orders more quickly. The upgraded workflow solution allows users to immediately elect to route residual share quantities not filled on POSIT Alert to be executed in the dark via Virtu’s Covert algorithm.

Back in April, the business’ Triton execution management system (EMS), Triton Valor, was integrated with the bookbuilding platform offered by equity markets technology solution, Appital. Named Appital Turquoise BookBuilder, the solution is an algorithmic bookbuilding platform which brings a typically manual and opaque process into an automated, electronic offering. More recently, in September, Triton Valor was integrated by Sumitomo Mitsui Trust AM. Triton Valor supports trading across: Munis, MBSs, global corporate and sovereign bonds, fixed income ETFs, EM debt, futures and CMOs, aiming to allow users to utilise a single dashboard across asset classes. Last March, Virtu added Liquidnet alumnus Leon Mouzourakis to its execution services team in an electronic trading role. 

XTX Markets 

London-based algorithmic market maker XTX Markets continues to impress as its operations develop. The business partners with counterparties, exchanges and e-trading venues globally and provides liquidity in the equity, foreign exchange, fixed income and commodity markets. XTX Markets’ clients range from regional banks to institutional investors – including macro, systematic funds and real money. The business hit record profits of £1.095 billion from its UK entities in 2022, up 64% from the previous year.

Following solid results, the business continues to be at the forefront of making financial markets more efficient for all participants. Its focus is on reducing the cost of trading for clients through its analytical tools and data-driven insights. The quantitative trading firm opened its new office in New York earlier this year, and also has bases in London, Mumbai, Paris, Singapore, and Yerevan.

The team is made up of more than 200 people across the globe, speaking 26 languages. Last October, XTX Markets appointed Zar Amrolia as chair, replacing Niki Beattie who held the position for five years. Amrolia’s appointment came as part of XTX Markets’ leadership transition. The business is focused on growing its equities franchise in the US going forward. In March, XTX Markets appointed Credit Suisse alumnus Charlie Whitlock as head of Americas distribution, leveraging his 25 years of experience in financial markets. Based in XTX’s New York office, Whitlock is responsible for growing XTX’s single dealer platform business in the US.

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Balyasny Asset Management appointed Harrison Chesterton as associate director within its equity finance trading division. According to an update on his social media, Chesterton joined Balyasny from Capstone Investment Advisors after nearly a year and a half, most recently serving as vice president, portfolio finance and treasury trading. Before joining Captsone Investment Advisors, Chesterton spent almost eight years at Barclays Corporate and Investment Bank. Most recently he served as vice president of delta 1 and equity financing – a role he was promoted to after holding the position of assistant vice president for three years.

Electronic market maker Optiver selected Philippe Rizzo to join its institutional sales team, effective from 9 October. Rizzo’s new role will be focused on cash equity sales in France, Belgium, Luxembourg and Switzerland. Rizzo will join Optiver from Instinet, where he previously served as a global equity sales trader. Prior to that he held a similar role at Goldman Sachs, based in London. Elsewhere in his career, Rizzo served as a senior global equity trader at Comgest.

Axis Capital Markets appointed Lewis Jones in an institutional sales and trading role. According to an update on social media, Jones joined Axis Capital Markets from IBP Markets, where he served as an equity sales trader for nearly three years. Prior to that, Jones held a corporate broker and equity sales position at ETX Capital. Elsewhere in his career, Jones was self-employed as an options trader at Delta Capital Management; a corporate broking consultant at Turner Pope Investments; and as a proprietary trader at Schneiders Trading Association.

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Rizzo’s new role will be focused on cash equity sales in France, Belgium, Luxembourg and Switzerland.

Rizzo will join Optiver from Instinet, where he previously served as a global equity sales trader. Prior to that he held a similar role at Goldman Sachs, based in London.

Elsewhere in his career, Rizzo served as a senior global equity trader at Comgest.

As part of his new role, Rizzo will be based in Amsterdam, reporting to Jean-Marie Tine, head of Delta-1 institutional sales for Europe.

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