Although this was my first attendance at a TradeTech event, TradeTech Europe
felt surprisingly familiar. I wasn’t sure whether it was the comfortable, spacious hall layout or perhaps the presence of the usual trading technology providers. In hindsight, it was actually the themes, talking points and underlying concerns of presenters and attendees alike that felt reassuringly familiar.
TradeTech regulars will have anticipated the low latency /algorithmic trading focus of the event; yet it was close running between dark pools, HFTs and the regulators as to who is the industry’s number one enemy. Predictably, these topics indeed sparked the most contentious, and most interesting, debates during the panel sessions.
What Hides in the Dark Pools?
Dark pools proved fairly contentious in panel discussions. As vocalised by Alexander Fleiss of Rebellion Research on the future of dark pools, there are good and bad dark pools, and being clear on the policies of each dark pool will grow in importance. By way of example, Alexander threw in the proverbial grenade, indicating that there was a higher presence of high frequency trading on the institution-operated dark pools than participants realised. In bringing two contentious subjects together, this session was shaping up nicely. The questionable practice of HFTs’ quote stuffing was given attention, before a satisfactory consensus was reached that dark pools serve an important market need, as evidenced by their continued growth.
The Brussels Effect
Although not present, it was Europe’s regulators (a change from the UK’s FSA), that bore the brunt of audience disdain at the show; a sense that policy setting in Brussels is truly disconnected from the realities of securities and derivatives trading, driven more by European politics than improving capital markets. I am sure that David Lawton, Acting Director of Markets for the FSA, left TradeTech relieved that for once it was his European counterparts that were taking most of the flack.
Not a Cloud To Be Seen
For me, what was surprising and somewhat disappointing was that Cloud did not feature more prominently. Amongst my fellow technology stream panellists there was almost a shroud of fear that raising what Cloud might mean for trading technology would take our discussion on a path of no return. This was a shame, as maybe Cloud would have given the debate some insightful differences of opinion.
However, polar opposing IT strategies of Yogesh Dewan of Hassium Asset Management and Mike Williams of Genesis Asset Management were a refreshing change during the second morning’s panel session. Hassium is bringing all IT and data back in-house to be masters of its own destiny in terms of risk and control, whereas Genesis is seeking to fully embrace the benefits and cost-savings of Cloud. That two asset management firm CEOs sat three feet apart could view Cloud so differently suggests its adoption might lead to some interesting fallout in 2013.
Familiar Faces, New Concerns
In summary, whilst the faces and themes of TradeTech Europe 2012 seemed reassuringly familiar to me, what captured my interest through the two days of speakers and panel sessions was the collective feeling that the industry is moving faster than ever, and no one seems sure where it is destined to end up. Without meaning to liken TradeTech Europe to a self-help group, I’m sure much of its continued appeal is allowing our industry’s fears and concerns to be aired so openly amongst friends.