[ C O V E R
I N T E R V I E W
routing system which acts similar
to an ‘algo wheel’. The automated
system uses the firm’s internal data
to check each and every order that
comes in, before it is sent to the
most suitable broker.
“We have a subset of flow that is
completely automated, from the
portfolio manager sending the
order down, right through to com-
pliance and execution,” Canwell
says. “It’s all done automatically
and sent out to the broker using our
internal TCA, which we are con-
stantly feeding with data to make it
smarter. Our approach is using a lot
of characteristics that inform algo
wheel decisions, but we implement
that human overlay given our active
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T.
R O W E
P R I C E ]
they can be.
As Canwell indicates, a lot of the development is also
undertaken internally. Ellis is currently working along-
side Muschamp to develop a live trading dashboard
that merges various systems to provide a real-time
picture of the landscape for informed trading decisions.
“The focus there is to build the dashboard with a
10-year view,” Muschamp explains. “This is the first
step, but we want to be able to evolve so that as the
environment changes we can do more in that moment.
We have lots of systems that you have to aggregate on
daily basis, but if you get all of those in one place, it’s
more consistent. You can then build on that rather than
adding an entirely new system.”
T. Rowe also keeps a close eye on alternative or
emerging technologies, and the traders engage with
vendors across the industry often to identify which
tools are stronger than others. But the direction of
"We have a subset of flow that is completely automated, from
the portfolio manager sending the order down, right through to
compliance and execution.”
EVAN CANWELL, EQUITY TRADER AND MARKET STRUCTURE ANALYST, T. ROWE PRICE
strategy.
“Some may say you should switch
off the underperforming algo
providers for a period of time but
we wonder whether that reduc-
es the ability to explore changes
to platforms and improvements
through investment cycles. We
believe if you have the bandwidth
and understanding of those plat-
forms it is important to have your
options open from a best execution
perspective.”
In a post-MiFID II world, Can-
well continues that everything has
become more detailed, meaning
there is far more to get to grips
with. When considering technol-
ogy, T. Rowe Price tends to focus
on its core business and ensuring
those processes are as efficient as
32 // TheTRADE // Spring 2020
travel is clear: further automation.
“We don’t turn down many meetings, put it that way,”
adds Pinnington. “If a vendor comes in and we haven’t
heard of them, we don’t immediately say no. We listen
to what they have to say so that we aren’t missing
trends. We have long-standing relationships with many
of partners that provide us with a different or unique
approach to markets.”
Intense role
The industry’s recent bid to shorten market hours
has taken the buy-side by storm in recent months.
European markets are open for business for 8.5 hours a
day, much longer compared to the US and Asia where
markets are open for 6.5 and 6 hours respectively.
It's thought that shorter market hours would spur
recruitment of more diverse talent, while easing the
strain that traders bear when working such long hours.
But behind the scenes, intraday liquidity is drying up
as trading volumes shift towards the most important
liquidity event of the day, the closing auction.
“The industry has complained about liquidity