We shape market thinking. Our experts monitor the latest industry developments, engage current debates, and offer ongoing analysis so we're prepared to offer up-to-the-minute guidance. Based on our well regarded understanding of worldwide financial markets, we are able to take an active role in the conversations that inform market regulations and are positioned to advocate for our clients' interests.
The Canadian market has traditionally been very block driven. Much of this block trading has been a result of relatively high levels of dealer capital made available to facilitate large institutional trades. While there is still a fairly healthy block market in Canada, the relative volume traded has declined significantly in recent in years. Street estimates conservatively suggest upwards of 40% of volume was traded in blocks at the turn of the century. By 2008 our data shows that numbers was just shy of 30%. By 2010 it had declined to just 19% of volume, and in recent months as volatility spiked the number has hit a low point of just 14% of total volumes.
When gambling is relabeled as just card-playing or dice rolling, TCA may finally become Transaction Research. TCA has penetrated portfolio construction, fund capacity analysis, liquidation studies, fund NAV determination, trading strategy, and real-time decision support. It was a big surprise when I heard the comment, ‘venue analysis is not TCA.’
While the rest of the world continues to be caught up in the fervor surrounding the March 2014 release of Michael Lewis’ Flash Boys, trade desks in Asia are grappling with issues related to the lack of regional market maturity. Many of the more advanced technologies that traders in the US and Europe take for granted are finally being introduced to Asia. In addition, the lack of competition with regards to alternative trading venues makes many local exchanges monopolies for the governments that back them.
This piece was originally published in The Financial Times.
As we enter the seventh year of a post-financial crisis world, it is hard to think of an area that has not suffered a knee-jerk reaction from politicians and regulators.
Certainly the scale of the subprime mortgage crisis, strained bank balance sheets and indebted sovereigns demanded urgent action. But as reform has been sprayed indiscriminately around the industry, solutions have been found to problems that did not exist.
- NASDAQ test of 14-symbols with 5/4 pricing model
- Overall market quality impact appears minimal in spread sizes and top of
- Test resulted in measurable decrease in NASDAQ market share, both in
quoted volume and traded volume
- ITG’s passive trading, through SLimit, increased trading at NASDAQ as a
result of shorter queues compared with historic averages
The current Oscar-nominated movie The Theory of Everything has its lead character Stephen Hawking laying out his vision of a single equation that explains all physical aspects of the universe. The scientist explains in lay terms the two broad areas of theoretical physics that have emerged over the last century – general relativity (as famously developed by Einstein) and quantum field theory (analysing the properties and effects of sub-atomic particles) – and the challenges of integrating both approaches in one over-arching set of theories. One approach looks at very broad aspects of the universe and space and time, while the other focuses on infinitesimally small objects as the basis for broader theories and interpretation.
As we approach 2015, European regulators are driving a secular shift in the buy side’s payment for research framework. Rarely have non-U.S. policies and procedures generated such a high level of influence on domestic institutional commission structures. Commission Sharing Arrangements are at the center of this debate.
This call discusses the following:
- The conflicting perspectives of the various European regulatory bodies on the future of payment for research
- Order handling and potential outcomes in a post MiFID II marketplace
- How these changes are impacting U.S. based investment managers today and into 2015
How informative are spreads for market participants who engage in FX trading? Can proper spread monitoring and analysis further enhance the investment and trading process? If so, how exactly? Can this relatively "old", sometimes overlooked metric, provide insights into important factors like the likelihood of execution and the cost of liquidity in this OTC market? Can spread analysis support real trading decisions (for example, trading now vs. later)?
Our Global Cost Review report for the Third Quarter 2014 studied global commissions and implementation shortfall costs for the period.
As we move into the new year, the regulatory and market structure landscape is unclear. Exchanges are evolving and the various global regulatory bodies are pursuing a wide range of independent initiatives. This targeted call will focus on near term issues and provide insight into the road forward in 2015.