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“Handling orders without speaking to
brokers on the phone, that’s probably the
most evident change on the trading floor
since the beginning of my career.”
“We now have alternative, greater
and faster methods of trading that
make my job more interesting. It
makes the process faster and I can
react to it faster and do my job
more efficiently. Handling orders
without speaking to brokers on the
phone, that’s probably the most
evident change on the trading floor
since the beginning of my career.
“The shift from telephone and
voice broking to handling every-
thing on screen means I don’t need
to talk to anyone, I can do every-
thing on a computer. Of course
you are speaking to people most of
your day about market structure,
but that shift has been the most im-
portant development for traders.”
Access crucial
He adds block trading as another
area that has been revolutionised
by technology, and fragmentation
has made this increasingly import-
ant. MiFID II – due to be imple-
mented by 3 January 2018 – will
see large-in-scale waivers exempt-
ed from new caps, on dark pool
trading, increasing the importance
of trading around the large-in-size
threshold.
18
TheTrade
Spring 2017
“Market fragmentation is a con-
cern in the US and Europe, so it’s
crucial to gain access to all mean-
ingful venues. Especially block
trading platforms like Liquidnet
and ITG that make my life easier
when seeking liquidity,” Becker
explains.
He adds it is equally important
to work with partners in technol-
ogy who provide state-of-the-art
technology to set up access to
other liquidity pools and crossing
opportunities.
Technology has led to an increase
in the electronification of markets
and the rise of high frequency
trading. Exchanges like IEX have
introduced speed bumps to slow
down these controversial market
participants.
Becker believes the speed bump
or the implementation of the
financial transaction tax could
be effective methods to deal with
these issues.
“Another issue is high frequency
traders, and I think the exchanges
have to find a solution. The imple-
mentation of a financial transaction
tax might be a step in the right
direction. Another method would
be to delay the arrival of orders or
make sure that an order has to be
in the books for a certain time.”
The financial transaction tax is a
levy placed on certain transactions.
It is a controversial rule which
some have argued could negative-
ly impact liquidity and market
volatility.
Regulatory pressures
Regulation is considered a hin-
drance to most. It is adding tedious
and burdensome tasks to the
trading desk and with MiFID II
just around the corner, this is likely
to gain pace.
Becker explains despite his
day-to-day role becoming more
efficient and easier to maintain
thanks to the introduction of more
electronic markets, regulation has
caused a different kind of shift in
markets today.
“The regulations are far too
tough. I believe especially in the
equities space it is overwhelming,”
he says.
In the equities space alone, in-
dustry experts have agreed certain
requirements under MiFID II are
near impossible to achieve by the 3
January 2018 deadline.
“MiFID II specifically makes
things even harder and especially
for those smaller asset managers.
When I hear news of de-regulating
markets with the dismantlement
of Dodd-Frank in the US - as it
seems - it makes me think it’s not
necessary to have more regulations
in Europe,” Becker adds.
US President Donald Trump or-
dered a review of the Dodd-Frank
Act earlier this year, as he also
looks to eliminate the US Depart-
ment of Labor fiduciary rule.