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predominantly a sell-side tool.”
“We didn’t do very much but over the five years
the exchange went from purely quote-driven to an
order-driven marketplace. We were based in Covent
Garden, which was slightly left-of-field as well, but it
worked. It worked very well.”
Eventually Tradepoint was absorbed into the Swiss
Stock Exchange and rebranded to Virt-x, but by
that time Miller had already left the firm to take up
residence in Henley-on-Thames with Invesco. His
time among the trading venues before the turn of
the millennium provides a unique perspective on the
contemporary landscape.
While market fragmentation is not a new phenom-
enon by any means, the sheer number of venues that
have come to market as part of the twin drivers of
electronification and regulatory change present the
asset management community with new challenges
to contend with.
“The fact that we have seen this proliferation of
trading venues and styles has meant that we’ve had
to keep very much on the forefront of technology,
more than anything else. So fragmentation is one of
the biggest challenges, and that’s alongside the ev-
er-evolving regulatory backdrop, with MiFID II and
other regulations coming in, and what may happen
with Brexit,” Miller says.
“It is something that we need to cope with, along-
side an increased number of orders, so we have
become more automated. The buy-side trader has to
become more involved in the electronic side from a
liquidity capture point of view. Price discovery isn’t
as straightforward as it used to be.”
Miller opines that the proliferation of trading
venues has now most likely peaked, but that simply
means that buy-side trading desks now have to make
the most of the skills and tools that are available to
them.
The Invesco desk in the UK is comprised of Miller
and a small team of what he describes as “general-
ists”, or traders with their own set of specialisations
all interacting with the available range algos and
high-touch desks, meaning that the desk itself can
be flexible enough to adapt to whatever strategy is
required.
Art meets science
The requisite skillset for a modern buy-side trader is
directly informed by the changes in market structure
and the way in which trading venues have evolved,
a “mix of art and science” that Miller has observed
first-hand throughout his career.
Issue 62 // TheTradeNews.com // 35