Buy-side Perspectives Issue 14 | Page 8

Equity trading - planning for the future by reflecting on recent events The new European equities market structure has given the buy side a wide variety of choice for block trading methodologies. Even if there are further adjustments expected, at least it seems like the regulatory changes have contributed to a more distributed, varied market structure with more choice. The latest newcomer seems to have various services that use the RFQ protocol which has been met by various levels of excitement among the buy side. The diligent buy side who are analysing the details, in an attempt to make sense of SI routing practices, are still facing challenges with double prints in addition to the lack of Fix tag harmonisation. It is therefore hard to evaluate the trading performance between venue types and trading methodologies as achieving a like for like comparison is challenging. With new types of trading services being introduced on the market, a few buy 2019 - IN STRATEGIC PARTNERSHIP WITH: side are signing direct agreements with ELPs for cash equity trading in addition to ETFs. The vast majority of the buy side are taking a more conservative approach letting their SIs determine the conditions that are appropriate. With a general concentration of flow among major brokers, we also identified which regional brokers still play a role in small/mid cap trading. The buy side have compared notes and discussed their experiences as K&KGC presented their detailed research of the buy side’s use of various TCA systems and performance benchmarks. Pre-trade analytic tools are mainly applicable for sub 10% ADV trades and broker relationships are key for any larger or less liquid trades. The buy-side heads of trading are challenged in their internal process reviewing ‘outliers’ and a practical approach is needed by the firm’s trade oversight committee members. ESMA’s initiative