THETRADETECH DAILY THE OFFICIAL NEWSPAPER OF TRADETECH 2023
Tom Stevenson : Scarce liquidity is changing relationships with the sell-side
Head of equity trading EMEA at Fidelity International , Tom Stevenson , talks to The TRADETech Daily about the importance of responsiveness , relationships , and resilience – and why liquidity dynamics are central to success .
What are the most relevant structural changes you are seeing in the market at the moment , and how are you adapting your desk to meet these new challenges ? There is a lot to choose from here , so rather than highlighting one topic I think the focus should be on having a robust , adaptable approach towards change . The trading teams are very resilient - see the responses to Mifid II , the pandemic , and most recently issues in the banking sector - and it is about creating the environment to allow our traders to respond to the events .
Important events shouldn ’ t happen around traders , they should be fully involved , so when we look at upcoming changes , be they market structure or new technologies , the team should be equipped to adapt to the new environment .
How is the relationship between buy- and sell-side changing , and how can you best collaborate with your counterparties to gain insights and boost returns in times of market stress ? There is so much data available to both the buy- and sell-side now that we are able to really focus in on areas that work , and others that perhaps need more attention .
Liquidity is at such a premium in our markets that being able to articulate to the sell-side where to focus in order to maximise connectivity is really valuable . While the best relationships have always been collaborative , I would say the developments in analytic capabilities have certainly changed some of the conversations the buy- and sell-side have .
What challenges are you seeing given the current liquidity fragmentation , and what steps are you taking to meet them ? Our markets are complex to navigate , and traders must work diligently to locate unique liquidity situations . For us it not only comes down to working with our brokers to tailor their offerings , but also for our traders to understand the liquidity dynamics within our portfolios .
Traders at Fidelity International proactively identify liquidity situations to our investors in names that we know they are watching , or that we feel may be interesting based on the characteristics of their funds . We are able to capture these situations and draw analytical insights into the value derived from a proactively generated order . With this data we can then encourage other investors to work with the trading team on execution strategies .
“ Important events shouldn ’ t happen around traders , they should be fully involved .”
What value does TradeTech hold for the buyside , and what do you most look forward to when coming to this event ? Bringing together so many connected people within our industry is invaluable . Learning about new technologies and the different perspectives to regulatory developments is important , to provide a rounded view of the industry . The quality of the panels is always high at Trade Tech , and it is a great opportunity to network and collaborate with our peers in a great city .
What panel / topic are you most excited about this year , and why ? I ’ m looking forward to the ‘ Tackling the liquidity shortage ’ panel - it ’ s a key topic in European markets , and the line-up of speakers is excellent . It ’ s good to see a dedicated DE & I and ESG section too , which I ’ m sure will be informative .
What ' s on your radar for 2023 , and what are your top priorities ? We are focused on scale and efficiency , ensuring we have the tools necessary to adapt to evolving client needs . The focus therefore remains on technology and processes , to ensure we equip our people adequately to deliver for our clients .
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