ing returns for investors. With
implementation just over a year
away, time and preparation is of the
essence. This is one of the reasons
why Liquidnet recently hired
former Tabb Group European mar-
ket structure specialist Rebecca
Healey, whose depth of expertise
and knowledge of the regulatory
process will be made accessible to
our members to ensure that they
can navigate through these changes
and equip themselves for success-
ful implementation.
MiFID II is a complex piece of
regulation with scope for interpre-
tation in a number of areas, and
therefore Rebecca’s expertise will
be invaluable to our members to in
this regard.
As well as informing Liquidnet’s
internal market structure work and
helping it to fully integrate with
MiFID II, Rebecca will also be
tasked with communicating with
members in order to help them
through the process of compliance
and, more generally, help them
make sense of things.
Trading in the dark is one area
where we already have a lot of
ideas on how to assist our mem-
bers. There are a lot of concerns
about what the double volume caps
for dark trading will entail and the
impact that they will have on trade
certainty. Fortunately, trading large
blocks with a high degree of cer-
tainty is a key feature of our trading
platform, so we’re well placed to
assist members comply with this
aspect of MiFID II.
Another significant area the
buy-side needs to address under
MiFID II is unbundling and the
knock-on effect that this will have
on the way they pay for services
but also on their ability to pursue
best execution.
Setting research budgets, ar-
ranging the creation of a research
payment account, and figuring out
how to make it compatible with
existing commission sharing agree-
ments, are all areas the buy-side
needs to think about.
At the same time, unbundling
represents a huge opportunity for
the buy-side to fully explore new
broker relationships to achieve best
execution. When research costs are
no longer bundled up with trading,
the buy-side trading desk can take
greater control of how and where
they execute their orders.
In preparation for MiFID II, it is
vital that buy-side firms have a best
execution policy in place and begin
to explore the full range of tools re-
quired to make that policy a reality.
We’ve got the tools to help support
buy-side traders to do this and a
platform where they can achieve
be passive order entry people, they
need to have a broad understand-
ing of the trading environment and
be versed in a range of analytical
and technology skills. For that rea-
son, this year Liquidnet launched
its Gateway training programme,
which is part of Headway, a larger
overall trader education curricu-
lum offered by Liquidnet for buy-
side head traders, with the view to
equipping their teams of traders
with the skills needed to face the
MIFID II challenge.
Based on our successful experi-
ence with Headway, we wanted to
do something for the traders who
have the potential to become heads
of trading desks in the future. We
ran events in New York, London
and Hong Kong to help these trad-
ers enhance the value they provide
to their desks and move their ca-
“This new level of control and responsibility
also means that the role of the buy-side trader
is becoming more professional and more highly
qualified than ever before.”
the block executions they need to
fulfil their best execution policy.
If the overall effect of MiFID II
is that more responsibility will be
placed on the buy-side than ever
before, then buy-side trading desks
will become far more central to the
operations of an asset manager and
the traders will need the tools and
access to platforms to help them in
that new role. We’re continuing to
work hard to produce functionality
that gives the buy-side more control.
This new level of control and
responsibility also means that
the role of the buy-side trader is
becoming more professional and
more highly qualified than ever be-
fore. Traders can no longer simply
reers forward. Each session is set up
with the aim of getting those traders
the technical skills they require to
be able to operate successfully in
the post-MiFID II world..
The next couple of years are
going to be some of the toughest
the buy-side has ever faced, but
they will also bring with them a
significant opportunity for buy-
side firms to take greater control
of their trading, and for traders to
positively impact the firm’s invest-
ment returns through the choices
they make. In doing so, Liquidnet
will continue to work with them to
support this development and pro-
vide them with the tools to meet
their evolving needs.
Winter 2016
FinTechQ
21