THETRADETECH DAILY THE OFFICIAL NEWSPAPER OF TRADETECH 2023
Joe Collery : A TCA wish list for the buy-side
Head of trading at Comgest , Joe Collery , sits down with The TRADETech Daily to unpack how buy-side expectations around TCA have evolved and how they can be improved to enhance the multi-asset trading experience .
How have buy-side TCA priorities evolved ? Traditionally deemed a compliance requirement for best execution monitoring , TCA has now become an integral part of every desk . TCA is an increasingly important tool for trading desks globally with further regulatory requirements and reporting capabilities deemed fundamental to its application . The increase of regulatory focus on best execution has led to an increased level of transparency across the industry as well as a proliferation of performance measurement tools and applications . On our desk we try to focus on a model of a centralised database with a multitude of benchmarks , all relevant timestamps and all execution venue data contained within . This allows for each department to interact with the data based on its own requirements , whether that be the trading , compliance , investor relations or the client reporting department etc . The flexibility and versatility of the database allows for reporting to meet each specific department ’ s needs .
On the pure trading side , it has certainly helped us to identify specific orders that could potentially be automated . Do they follow a pattern ? Is an algo wheel appropriate ? or whatever we ’ ve deemed is the best method of execution in each specific case ? It ’ s about interacting with the data to make more informed , meaningful decisions utilising it .
Have can current offerings be improved to better meet the needs of the buy-side ? Ideally there would be more critical information incorporated into our EMS so we can see what activity there is around our orders . We would like to know where the blocks are going off , in particular the ones where we are not involved , what happened a few minutes before , what happened afterwards . The broker venue behaviour needs to be in there too . In the algo space when you ' re trading with a broker , they ' ll tell you the venues and parameters they use . Considering the broker manages this data in an active manner , why not provide
“ Films like Wolf of Wall Street , while entertaining , have given an incorrect or an archaic view of our industry .” this crucial information to the EMS and empower the user to simply select or deselect a particular venue they deem appropriate for the specific trade at that time .
It ’ s also the pre-trade element . The theoretical cost of the trade , your expected cost , how can we know exactly how much it is versus the actual performance of the trade ? What source do you provide and what metrics are being used ? Why not have all the venue providers with their smart front ends feeding directly into your EMS . In this way , instead of you fishing and having to open yourself up , all of this committed liquidity is available at levels that both sides are comfortable with . You could sort your EMS by whatever hierarchical structure appropriate to each order type . That way you haven ' t even spoken about your order and all available liquidity options are centrally displayed in a clean line across your EMS . It removes the need for blotter scraping that take information from you and optimises the information already available out there . It would increase market activity during the day and shift a portion of the liquidity currently seen at the Close .
As head of a desk , what are some of the biggest remaining pain points in trading and how can they be addressed ? The number one current pain point is hiring . We currently receive perhaps a handful of CVs whereas 10 / 15 years ago it was a lot more . There is a sentiment that perhaps films like Wolf of Wall Street , while entertaining , have given an incorrect or an archaic view of our industry . We ’ ve shifted and mindsets have evolved impressively through covid . We ' ve shown that our industry is a much more pleasant and caring
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