[ A D V E R T O R I A L ]
TECHING UP FOR MIFID II
The buy-side is going to need more technology solutions than ever before to cope
with MiFID II. We catch up with TradingScreen’s head of European sales and account
management, Chris Hollands, to discuss what the buy-side are telling him.
The TRADE: What are the main
issues you’re hearing from the buy-
side as MiFID II approaches?
Chris Hollands: Right now they’re
full of questions; Do I have the
right set of execution and liquidity
management tools especially in the
OTC world? What are my report-
ing obligations? Do I have all of the
access to the necessary execution
venues?
We’re also seeing the highest
number of buy-siders actively look-
ing for new systems for a decade,
including execution management
systems (EMS). This is primarily
being driven by a flight to quality
to ensure they can get systems that
fully meet both their regulatory
and business needs.
TT: Is this activity driving an opera-
tion and behavioural change on the
buy-side trading desk?
CH: Absolutely, we’re seeing elec-
tronic trading convergence and
consolidation across asset classes,
which is driving demand for more
multi-asset traders and systems
that can handle a multi-asset class
trading philosophy.
There’s also a much closer
spotlight on buy-side traders than
ever before on the achievement
of best execution, which means
they’re looking for analytical and
execution tools that can help them.
We expect there to also be greater
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Spring 2017
scrutiny on algo usage, meaning
traders will need a better under-
standing of how the algos they use
actually behave and the results that
they produce.
TT: How will this impact buy-side
workflow?
CH: We foresee an increased dia-
logue between the buy-side trader
and the PM to communicate more
on the progress of in-flight orders
and execution choices. If anything,
the role of a trader becomes more
important as they will not only
have to seek liquidity and manage
the trade but be more conversant
in reporting mechanisms and
regulation. I foresee good traders
being an interpretation layer for
the PMs. This will be facilitated by
the use of more real-time, in-trade
analytical tools including execution
venue analysis, OSUs (Order Status
Updates) from the brokers’ algo
engines and chat tools.
TT: A lot of emphasis has been
placed on the importance of data
management and reporting under
MiFID II, what impact will this have
on buy-side EMS use?
CH: EMSs have long played a cen-
tral role in that piece of the trading
workflow, whether it’s accessing
transaction cost analysis (TCA)
on a pre- and post-trade basis,
connectivity to order management
systems or feeding market data.
Some EMS providers have already
been pushing towards offering
hosted connectivity and data hubs
for a while regardless of MiFID
II, meaning that their clients can
leverage a broadly connected
pre-certified FIX network and a
very considerable repository of
product and market data. On the
reporting front, we have recently
made a very significant investment
in our integration of Tableau, one
of the leading data representation
systems available in the market
place.
TT: With so many venues and
execution options available, what
sort of analytics are the buy-side
demanding to help them in their
quest for best execution?
CH: Firms are looking for both
neutral and broker-sponsored pre-
trade and in-trade analytics, ideally
with exception-based alerting to