RBC Capital Markets appointed Mitul Patel director, central bank sales, based in London. As part of the role, Patel will hold responsibility for distributing global rates product, alongside collaborating closely with global trading teams, internal partners in DCM, syndicate, and sales to execute strategy and drive growth. Patel brings more than 20 years’ industry experience to the role, primarily across rates and FX. He joins from HSBC, where he most recently he held responsibility for primary coverage on G10 rates for reserve managers and UK real money clients.

Fidelity Investments appointed Sarah Lambert senior trader, based in Boston. Lambert joins Fidelity from MFS Investment Management where she spent the last five years, most recently serving as investment officer, fixed income trader. Before joining MFS, she spent seven and a half years at BNY Mellon (now BNY). Initially during her tenure at BNY Mellon, she served as an assistant portfolio manager, fixed income. Following this, Lambert was promoted to portfolio manager, fixed income for just over five years.

Australian pension fund AustralianSuper selected one of its own to take up the reins for its dealing business. According to an update on her social media, Nina Marsh has been appointed manager of dealing at the buy-side firm after spending the last two years as a senior dealer at the firm. Prior to joining AustralianSuper – and the buy-side for the first time – in 2022, Marsh spent 14 years at Liberum as an equity sales trader and nearly nine years at Deutsche Bank in the same role.

Hong Kong Exchange and Clearing (HKEX) appointed Vicky Chan managing director, head of post-trade, effective 5 August. Chan returns to HKEX after previously serving for 15 years at the group in a range of teams including cash settlement, clearing operation and platform development. Previously in her career, Chan held roles at various companies including AIA Group, Goldman Sachs, UBS and PricewaterhouseCoopers. As part of the new role, Chan will be responsible for leading the post-trade team to further elevate HKEX’s service offering across its clearing and settlement systems, the firm confirmed.

The post People Moves Monday: State Street Global Advisors, RBC Capital Markets, Fidelity Investments and more… appeared first on The TRADE.

As part of the role, Patel will hold responsibility for distributing global rates product, alongside collaborating closely with global trading teams, internal partners in DCM, syndicate, and sales to execute strategy and drive growth.

In addition, Patel will support the execution of RBC’s global distribution strategy and coverage model for the central bank and sovereign wealth fund client base.

He will report to Kofi Oteng, European head of flow rates sales, The TRADE understands.

“Mitul’s appointment and the expansion of RBC’s central bank coverage model demonstrates an ongoing commitment to driving growth and increased relevance with international investors in global markets flow product,” said RBC in a memo.

Read more: Fireside Friday with… RBC’s James Hilton

Patel brings more than 20 years’ industry experience to the role, primarily across rates and FX.

He joins from HSBC, where he most recently he held responsibility for primary coverage on G10 rates for reserve managers and UK real money clients.

Patel appointment follows Elsa Lignos’ expanded role as global head of central bank coverage – global markets, in addition to global head of FX strategy and head of European institutional FX sales and futures, last year.

The post RBC Capital Markets taps HSBC for new director of central bank sales appeared first on The TRADE.

Algo trading is very well established and we’ve had this catalyst of Mifid II, which effectively means that more and more flow is now directed based on performance, particularly via performance weighted algo wheels. The biggest ask that we get when we’re pitching with clients is to present a differentiated approach. The idea of selecting a pool of homogeneous algorithms just isn’t going to result in performance improvements over time.

The challenge is coming up with new ideas which are potentially going to result in outperformance. You’ve got a lot of brokers delivering very similar VWAP strategies, but if they’re broadly built in the same way, you’re not going to learn from that. RBC built an AI Research Institute called Borealis AI, nearly a decade ago. It serves the entire RBC group. We’ve been a key beneficiary of that and we’ve used that expertise to build a segregated algo platform called Aiden. We’ve been running that in North America for over four years and we launched in Europe at the back end of last year.

We go through periods of different types of algos being more or less popular depending on the different challenges or the different trading environments. Broadly, we find VWAP strategies and close strategies being commonly used by the index or quant firms who often will be trading baskets of orders. There’s a huge focus on the closing auction, giving the amount of volume that’s now trading there. From a single stock trading perspective, there’s an enormous amount of fragmentation in the market now. Not just in terms of number of venues, but also the different types of liquidity. Whether it’s SIs, periodic auctions, and lots of OTC liquidity now.

Clients are starting to use liquidity seeking algos a lot more than traditional POV algos because they deem them to be more intelligent. The quant hedge funds will either be using DMA and running their own strategies or basket based algorithms. But single stock investors, where they’re literally trading a single stock at a time, they’ll be looking for something much more liquidity focused.

How is buy-side demand for multi-asset capabilities changing and what is driving this?

More than anything clients are looking for choice. In the equity world, we’ve traditionally had different execution desks – high touch, low touch, portfolio trading – clients are starting to look at that and want to see those same choices across the different asset classes. We’re seeing more and more of our clients working on multi-asset desks.

There’s an element of resource constraints. Firms are looking to do more with less. There’s an element of wanting to learn from the different asset classes and optimise what you’re doing versus best in class across these different asset classes. There’s lots of different examples of that across FX and futures. The latest is probably the ETF marketplace.

ETFs have traditionally been a big RFQ market and it hasn’t really been disrupted for a long time, but more recently, we’re starting to see lots of new ideas around how to change that marketplace. From the buy-side perspective, there’s more and more firms looking to launch ETFs and not just passive but active fund managers as well. There’s a drive to build a more transparent marketplace where they believe that asset class can thrive. Specifically, we’re partnering with a number of firms to build algos that encourage more liquidity onto lit markets, whereas traditionally it’s been RFQ or OTC.

How do you expect buy-side demand for artificial intelligence to develop in the coming years?

Lots of clients are learning about how AI can help them in their own businesses. The evolution of generative AI is incredibly exciting and the scope to adopt these technologies to drive efficiencies and improve service across all sorts of things within financial services is huge. Anything which is repetitive and not really adding too much value, AI can be massively helpful. At the same time, and it has been discussed many times at conferences, we have to make sure that we’re delivering these things in a responsible and ethical way and that you’ve got really strong governance around implementation.

I suspect that AI is very well adopted amongst a relatively small number of our hedge fund clients already. I suspect there’s plenty of clients out there who are already reaping the benefits of this type of technology. But there’s an enormous number of clients that are still trying to understand what the potential is and where exactly they can use it, how they can use it, and what the governance structures are going to have to look like internally etc. Over the next five years, there’s no question that people are going to be forced to take note and figure out how they can use this technology in order to stay competitive.

The post Fireside Friday with… RBC’s James Hilton appeared first on The TRADE.

RBC BlueBay Asset Management’s investment-grade credit trader, Christopher Lemmo, has left the firm to join Norges Bank Investment Management after almost 13 years at the fixed income focused asset manager. He has been appointed senior trader at Norges Bank Investment Management, based in New York. Lemmo joined RBC as an investment-grade credit trader in 2010 after previously spending nearly four and a half years at Vanguard in its analyst development programme and later as an investment-grade credit trader. Joining the US-based RBC BlueBay desk following Lemmo’s departure is Ben Romeo, who has been appointed senior trader after most recently serving at AXA Investment Managers for a decade.

Aviva’s global asset management business has appointed Jill Barber as global head of distribution, who is expected to join the firm later this year subject to regulatory approval. Barber will join Aviva Investors from GAM Investments, where she has served as global head of institutional solutions since November 2020. She brings 25 years’ experience in investment management to the firm, having held senior positions at Jupiter Asset Management, Franklin Templeton Investments, Hermes Fund Management and Fidelity International. Barber will succeed Louisa Kay, who is set to retire at the end of this year following three decades in the investment industry. Kay will continue to lead the distribution function until Barber joins the firm. 

The post People Moves Monday: Musical chairs appeared first on The TRADE.

Heraty is set to take on the role of head of US equity solutions and structured product sales, whilst Gleave has been appointed as head of European equity solutions.

Heraty was previously at Credit Suisse where he spent four years as head of North American equity derivative sales. Before that, he worked at Bank of America for 11 years, most recently as head of North American equity client solutions sales and structuring.

In this new role, he will be based in New York and focus on growing RBC’s equity structured product and Quantitative Investment Strategies (QIS) business with both institutional and private bank clients.

Heraty will report to Sian Hurrell, head of global sales and relationship management and global markets Europe.

Prior to this move, London-based Gleave was head of equity solutions for EMEA at Nomura and has also previously held senior positions at investment banks Morgan Stanley Bank of America, and Lehman Brothers.

As head of European equity solutions, he is set to expand RBC’s North American corporate equity derivative (CED) offering across Europe and work on increasing cross-border connectivity with North America for its European clients.

As part of this push for greater cross-border collaboration, Gleave will report to both Jason Goss, head of European solutions and structured product sales, and Graeme Bath, global head of corporate equity derivatives.

He will partner with several private side teams, such as: European solutions, equity capital markets and global investment banking, according to the internal memo.

Earlier this month, The TRADE reported that RBC’s co-head of European electronic sales and trading, Bianca Gould, was set to leave the bank after almost three years as part of streamlining measures across the electronic trading business.

The post RBC grows equities workforce with two new managing directors appeared first on The TRADE.

Former head of platform sales at Citi, Matt Cousens, joined execution algorithm provider BestEx Research as its head of EMEA equities. In his new role, Cousens will be responsible for driving the rollout of BestEx Research’s equities execution algorithms for US and Canadian trading to the European customer base as well as their general globalisation. He joined the firm after most recently serving at Citi for two and a half years, responsible for distribution and sales across its cash equities platform. Previously in his career he spent a year and a half at Barclays bank as co-head of electronic trading and head of EMEA equities execution sales and 12 years at Credit Suisse as its co-head of advanced execution services (AES) sales for Europe.

Merchant bank Panmure Gordon selected a former Winterflood Securities individual as its next head of trading. James Perry joined Panmure Gordon as head of trading after spending the best part of 19 years at Winterflood as its head of small cap trading, according to an update on his social media.

The post People Moves Monday: A series of senior appointments appeared first on The TRADE.

Liber joins RBC Capital Markets after a non-compete period of one year.

Prior to that, Liber spent nearly five and a half years at Optiver, most recently serving in a derivatives sales position, based in the Amsterdam.

Before Optiver, Liber spent a year and a half at Deutsche Bank in a London-based equity derivatives sales role.

Earlier in his career, Liber held an equity derivatives and index structuring position at Société Générale as well as a fund derivatives and index structuring role at Exane.

“I am pleased to welcome Charles to RBC. He is based in Paris and is part of our strategic investment in the Continent across France, Germany and Switzerland,” said Paul Adams, head of cash equity & flow derivatives.  

“The expertise he brings to the business will help us build on our commitment to grow and expand our European Flow Derivatives client footprint, revenue and market share with our continental client partners.”

The post RBC Capital Markets names new Continental Europe head of equity derivatives flow sales appeared first on The TRADE.

Would you consider the recent Mifid compromise that was approved a success?

It has been a busy couple of years in terms of market structure and regulatory developments, and it is a complex environment for everyone to navigate. We can expect this to continue in 2023 as both the UK and EU continue to solidify their positions on Mifid. It will be interesting to see how the UK’s approach unfolds further this year and how it will differ from the EU. It is very likely that regulatory divergence between the UK and EU will come to pass, at least to some extent. We have already seen this in the rules around dark trading.

There is also the question of the timeline – will the UK implement changes more quickly than Europe? We know that divergence between the UK and EU on regulation isn’t something that market participants particularly want, but I think everyone is looking forward to a period of more certainty and stability that will enable us to adapt, evolve and continue to innovate on behalf of our clients.

Which areas have proved contentious with participants?

Reaching a consensus on any rule changes is always going to be a more complicated process within the EU, due to the number of stakeholders – and the agreed compromise could change as negotiations within the EU progress. As an industry, we can only hope that compromise does not impact market structure to the detriment of investors and clients.

The consolidated tape is arguably the most contentious area, but it is encouraging to see progress on establishing a tape after years and years of discussion on this subject. Another positive is the inclusion of best bid and offer ‘snapshot’ data, which could open the door to the inclusion of pre-trade data later down the line. Hopefully, the European Parliament will adopt a more ambitious stance (ideally a tape which is real-time and includes both pre- and post-trade data) and grasp the opportunity that the tape presents to grow European secondary markets with both hands.

What is driving the change of heart around systematic internalisers and dark trading?

Brexit has been one of the key drivers. The UK has been clear in the absence of equivalence that its focus is to become more competitive globally. Removing some of the restrictions on certain types of trading or liquidity under Mifid has been central to this strategy so far. Unsurprisingly the EU is watching the UK very closely and vice versa during this process, which is a positive.

There is a risk that some of the proposed restrictions in Europe, for example the minimum thresholds on midpoint trading on dark order books and SIs, which I would note is at odds with global practices, will put EU markets at a competitive disadvantage globally. In the long-term, the consequence could be a shift in liquidity from Europe to other markets, like the UK, where things will be less restrictive.

Dark books and SIs are a vital part of the liquidity landscape – any measurements to restrict certain liquidity pools should be backed by empirical evidence and analysis to avoid any potential unintended consequences.

The European Council’s proposed removal of limits on SIs and the 4% cap at the venue level on dark trading (in favour of a 10% market-wide cap) is, however, a positive step towards reducing some of the complexity that Mifid II introduced in 2018. Simplifying the regulatory regime for market participants and driving growth across European capital markets must remain the key focus of the Review.

Will these collective changes within the compromise reduce or reinforce fragmentation in Europe?

The Mifid regime created the fragmented market structure in Europe and that has increased complexity for market participants. The outcome of the Review will hopefully tackle at least some of those issues.

Fragmentation is not always a bad thing though. It drives competition, innovation and choice of execution for investors, which is crucial in the quest for best execution. Mifid II sparked the development and growth of things like algo wheels, periodic auctions, conditional venues – all of which are now a fundamental part of the liquidity landscape and the trader’s toolkit.

How do you expect this compromise to evolve throughout the regulatory process this year?

It is really difficult to make predictions on where we will end up at this stage, but there are several other market structure topics that I think will come more into focus for market participants this year. For example, solving the challenges around market outages and the increasing costs of market data, are now key topics of discussion with clients.

Reducing the settlement cycle will also likely become a more global focus. The US, Canada and other markets are migrating in the next couple of years and the UK is examining a migration with a newly-established taskforce. The impact that could have on firms in Europe will be significant. One thing’s for sure, it will be another eventful period for market structure developments!

The post Fireside Friday… with RBC’s Hayley McDowell appeared first on The TRADE.

The early signs are positive: A real-time pre and post-trade consolidated tape for equities has already gained strong support across key EU institutions, and is something we at Cboe have long advocated for to help drive investment and improve the resilience of markets. In the area of equity transparency, the bloc has a choice: Pursue an approach, supported by incumbent EU exchanges, of forcing market participants into low latency central limit order books, in the naïve belief that this will enhance institutional investor outcomes; or realise that the best way to attract investors to Europe is by catering their diverse needs and offering different trading mechanisms for price and size discovery.

The UK is embracing the latter approach, and we are hopeful EU policymakers will follow suit to restore its competitiveness and promote open, competitive and pan-European markets, which ultimately benefit end investors. Elsewhere, we believe brokers will continue to migrate their passive, displayed liquidity to pan-European venues that offer higher execution certainty and lower costs, as well as to alternative mechanisms such as pre-trade transparent Frequent Batch Auctions that help minimise price slippage.

Improved transparency is elusive – why? Trade reporting remains fragmented, not standardised and APA data is difficult to access. But hope exists! Amendments to MiFID II in 2021 lifted the technical and commercial impediments to a CTP emerging. The glass is starting to look half full.

Dissenting voices remain from those seeking to protect entrenched positions. Those in support of the CT need to up their efforts to present the benefits. Peering into 2024, I predict the CT will encourage growth in market participation, reduced market data costs and improvements in data products: liquidity analytics, TCA, pricing engines and portfolio valuations.

In 2023 [I predict] we will see political agreement on the legislative framework affecting market transparency. Q3 will mark the start of The CT tender process and by year end a CTP will be appointed. The CT will be one run as a market utility not as a data monopoly.  Surely, this is the fairest way? 

“The best way to predict your future is to create it,” Abraham Lincoln.

Adam Conn, head of trading at Baillie Gifford: T+1 settlement – coming to a market near you? Assuming the US and Canada go live in 2024, I imagine the full impact of mismatched settlement dates; funding costs and the ability to trade settlement FX become more apparent to market participants. Will the UK and EU follow suit? I don’t want to spoil the surprise. 

Matt Short, equity trading desk manager, BNY Mellon Pershing: Regulatory reform of global capital markets will continue to influence the trading landscape in 2023 and beyond. Cost transparency and payments for order flow (PFOF) is a growing focus for regulators around the world but differing opinions on dark pools and alternative trading systems is creating divergence that will ultimately lead to increased market fragmentation in the year ahead.

Market data pricing is another priority for regulators, but standardising data across jurisdictions requires consensus from regulators, exchanges, SROs, broker-dealers and third parties – a highly complex undertaking and a process that will result in a lack of harmonisation between markets (e.g., UK and EU) as they build out their own agendas for capital markets growth. This increasingly complex, and in some cases fragmented, regulatory agenda will have a disproportionate impact on smaller firms, with the time, tech and expertise it takes to be compliant increasing fixed costs and subsequently impacting the bottom line.

Therefore, heading into 2023, we expect to see more mid-sized firms turning to outsourced solutions to build efficiencies and avoid the rising cost of high-quality execution, focusing instead on fiduciary obligations to clients.

Linda Gibson, director and head of regulatory change, BNY Mellon Pershing: Resilience and adaptability will be essential strengths for firms through 2023. Trading professionals need to be cognisant of the shift away from the predictable regulatory agenda they are used to as UK and EU regulatory bodies step up their often politicised post-Brexit battle to lure financial services to their respective shores. To date, we have seen UK and EU regulators take different approaches to operational resilience, CSDR and MiFID II, and divergence on rulemaking should be seen as a given moving forward. Politics will continue to shape the UK-EU relationship for financial services, with the UK taking a principles-based approach to regulatory reform while the EU adopts a more prescriptive plan of action. For example, the UK is looking to remove the share trading obligation (STO) and double volume cap (DVC) as part of the Wholesale Markets Review whilst EU proposals will recalibrate or make technical changes.   

In UK policy, we can expect tax reductions and deregulatory initiatives from the government in 2023 and beyond in an attempt to boost international competitiveness and stimulate financially-led GDP growth at a time of economic decline. As outlined in Jeremy Hunt’s autumn statement, this will include a plan to repeal EU red tape and replace it with rules tailor-made for the UK. However, it is important for firms to remember that even deregulation will require internal changes and adaptations. It won’t simply be a matter of switching off on certain compliance matters.

James Baugh, head of European market structure, Cowen Execution Services: We should hopefully get clarity in the early part of the year on where the European Council, Parliament and Commission stand on key issues regarding proposed dark and Systematic Internaliser thresholds and the Consolidated Tape. However, it’s unlikely we’ll see any agreement reached until mid-year or later.

This will depend on whether a compromise can be reached between those looking to compete with the UK versus those considering more inward-looking policies. Regardless, changes are not likely to kick in until 2024. Separately, the FCA will hopefully provide some clarity on several of its proposals, including the UK’s version of the CT. In the interim, the EU and UK will have to contend with a number of operation hurdles in 2023, including the end of the SEC’s No-action letter on “hard dollar payments” for research, which kicks in mid-year and readying for the introduction of T+1 settlement in the US which is currently scheduled for Q1 2024.

Liquidity trends will likely continue on their current trajectory as alternatives challenge the incumbent exchanges for market share and the primary close remains under competitive pressures. Retail will also likely continue to be a topic of discussion into 2023, including whether the EU will impose an outright ban for Payment For Order Flow. And finally, I hope ESG continues to be part of the discussion regarding the improvement of trading workflows and the wider execution business throughout next year.

Hayley McDowell, EU equity electronic sales trader / EU market structure consultant, RBC Capital Markets: Next year will be a critical one for regulation in European equity markets. Approaching two years after the UK formally left the EU, the bloc is still contemplating the future of regulatory alignment with the UK. Despite recent market earthquakes, the UK remains a vital market in Europe and any divergence presents a major challenge to participants from across the spectrum. Next year, the MiFID review will come into sharp focus – as the EU looks to shore up aspects of the regulation while maintaining its competitiveness not just with the UK, but globally.

We can also expect a debate around what an effective consolidated tape looks like – there is a huge opportunity to grow secondary markets – but the success of the tape will depend on the proposals put forward by the EU. Market participants will be keeping a close eyes on the regulatory debate in Europe and whether it will bolster market structure or fall short.

The post The TRADE predictions series 2023: Market structure and regulation, part one appeared first on The TRADE.

The electronic trading platform, first launched in October 2020 , uses deep reinforcement learning processes to adapt to changing market environments and improve trading results based on live market data. It was developed over five years by traders and AI scientists at RBC and Borealis AI, a research and development centre created by RBC which opened its Toronto lab in June 2017.

Its latest algorithm leverages more than 300 data inputs, combinations of actions, and post-execution optimisation to solve for the arrival price challenge and reduce slippage, using deep reinforcement learning to gain experience in real-time, and learning how to trade better over hundreds of thousands of decisions – according to Jas Sandhu, global head of agency electronic solutions at RBC Capital Markets. It works to explore new trading relationships within the prevailing market conditions and guardrails by continuously assessing market information to dynamically control multiple aspects of every action throughout the order lifecycle.

“Since launching the Aiden platform… we partnered closely with clients to develop a more holistic tool for primary benchmarks and solve for greater simplicity,” Bobby Grubert, head of digital solutions and client insights at RBC Capital Markets, said. “The launch of Aiden Arrival signals an important milestone in the expansion of our innovative Aiden trading platform. Together with Aiden VWAP, this is just the beginning of the full opportunity for clients to have better performing trading tools.”

The Aiden trading platform is part of a broader long-term strategy from RBC to leverage and develop the potential of AI for its clients. “[The Aiden platform] was a big scientific milestone that demonstrated how a brand-new AI technology could succeed in extremely complex environments,” noted Dr Foteini Agrafioti, chief science officer at RBC and Head of Borealis AI.

“RBC is reimagining the future of financial services, with a focus on anticipating client needs and solving for them in innovative ways,” added Grubert, who confirmed “significant investment” from RBC in new technologies, including AI.

“We are making tremendous strides to bring more insight and value to clients and communities to help power their ambitions.”

The post RBC Capital Markets launches second algorithm on AI-based electronic trading platform appeared first on The TRADE.