CLSA is jumping into the electronic trading business.
The agency-only broker, which to date has only offered high-touch trading to institutional clients in the U.S., is now expanding its business and offering its algorithms and smart-order routing to gain market share and get into the electronic trading game, according to Ruth Colagiuri, director of electronic trading at CLSA.
CLSA was formerly a part of Credit Agricole Securities, USA Inc. Now it is an independent broker-dealer. It is registered as CLSA Americas in the U.S.
CLSA was founded in 1986 by ex-journalists Jim Walker and Gary Coull. It operates from 20 cities in Asia as well as in the U.K. and the United States, employing 1,500 people. France’s Credit Agricole SA owns CLSA and is currently in the process of selling the Asian-based broker to CITIC Securities, a Chinese-state owned firm, for $1.25 billion. The deal follows the sale by Credit Agricole of its Credit Agricole Cheuvreux broker-dealer unit to Kepler Capital Markets in May.
CLSA looks to parlay its international trading success and model here and has served U.S. fund managers investing into Asia for more than 25 years. In 2009, CLSA initiated coverage on U.S. stocks and its team of more than 20 research analysts provide investors with a unique perspective. Domestic sector coverage includes autos, banks & finance, beverages, chemicals, energy, food & agribusiness, healthcare, hotels & leisure, materials, metals & mining, retail and technology.
The firm already offers direct market access connectivity in Asia as well as algorithms in Australia, Hong Kong, India, Indonesia, Japan, Korea, Malaysia, Singapore, Taiwan and Thailand. It also offers agency-only block-trading service in the Asia-Pacific region with a block desk headquartered in Hong Kong.
Now CLSA is looking to get a piece of the U.S. market. Colaguiri said she will be building out the U.S. electronic desk, complementing its extent high-touch business, hoping to tap into the buysides’ desire to keep its trading costs low in the current low volume and commission environment.
“Our platform now supports the individual execution analysis, rapid customization and transparency that our clients demand,” she told Traders Magazine. “We are neutral in way we access liquidity for our clients and are focused purely on providing best execution.”
Colagiuri, who has worked for Credit Agricole since 2011, seems well suited to the task of heading up the business and is no stranger to electronic trading. -Before joining the French bank – she spent a year at UNX as head of product management, specifically the broker’s Catalyst execution management system. Prior to that, she spent nine years at Merrill Lynch as part of the electronic trading team that built out Merrill’s pilot offering of algorithms, smart routing, crossing and DMA for equities, options and futures.
While Colagiuri is located in New York, the firm has sales trading desks located in New York, Boston, San Francisco and Chicago. The firm has nine sales traders on their low-touch team in the U.S. and the average experience of the desk’s traders is 10 years.
“Every one of my traders comes from an established electronic trading business background and has spent time on the electronic side of the business,” Colaguiri said.
CLSA is white-labeling algorithms from a vendor, which Colaguiri declined to name. The desk offers clients both standard schedule-based algorithms, such as VWAP and TWAP, as well as other non-scheduled based liquidity-seeking algos. It has no plan to open its own dark pool, she added.
“We’ve tried to keep the amount off algos we offer tight – not too many,” she said. “The algorithm business has become commoditized so we’re keeping our offering limited but not too narrow.”
The broker also provides program trading and post-trade risk control management to clients, Colaguiri added.
“We are definitely in a growth phase,” she said. “In the next six months, the goal is to grow our client base in a measured way and be thoughtful about the way we grow the electronic business.”
