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costs for investors — and that firms
won’t be able to handle escalating
costs indefinitely.
MiFID II, on the other hand, has
had far more measurable impacts
on the market, despite a widely
acknowledged increase in market
structure complexity. McLoughlin
also recognises this, but says that
with enough hard work put to-
wards understanding the changes,
decisions such as venue and broker
selection in a post-MiFID II envi-
ronment become easier.
“I saw MiFID II as an opportuni-
ty to try to get ahead of the game,
just by trying to understand as
much as possible about what was
changing and the opportunities it
brought, to see where that could
enable me to add value to the firm,”
he says.
“I think we navigated MiFID
II pretty well, particularly the
trading landscape, even down to
the trade and transaction reporting
or going back further to figuring
out how we’re paying for research
and speaking to all the brokers on
the different trading and research
models. I don’t get out a lot, so I
thought it was quite interesting!”
McLoughlin highlights an in-
crease in innovation levels within
the fixed income space, particular-
ly the emergence of all-to-all trad-
ing platforms, as one quality-of-life
improvements to come out of
MiFID II. The mix and variation
of trading styles that now exist for
multi-asset firms such as Liontrust
may cause complications, but it has
also been a good opportunity to in-
crease efficiencies via automation,
according to McLoughlin, who
details that the firm has ramped up
its automation levels for some of its
asset classes.
He says that the firm is moving
towards “semi-automation” in
some areas, but that it is not auto-
mation for the sake of it, rather an-
30 // TheTrade // Fall 2019
M C L O U G H L I N ]
other opportunity to focus on the more difficult tasks
on the desk. McLoughlin’s approach is to “automate
what is sensible”, in terms of improving efficiency and
performance, throughout the era of MiFID II, which
has allowed the firm to grow. “We had three traders
when we were on £4 billion AuM and we’ve got three
traders now we’re at £17 billion,” he says. “Not to say
that team won’t expand, but we’ve managed to do it
by being a bit smarter, by leveraging technology and
changing processes to get there.”
Global uncertainty
While instability and unpredictability seem to be the
current modus operandi for the global financial envi-
ronment due to events such as Brexit or the ongoing
US/China trade war, McLoughlin says all of this pales
in comparison to the seismic events that rocked the
global economy 11 years ago.
“I think 2008 was special, I’ve got to say, when mar-
kets were going down 6%, 7%, 8% on a daily basis, that
was a bit of a shocker!” he comments. “So this doesn’t
touch the sides of that, quite frankly.”