As the securities industry continues to break out of silos and vertical business models, lines are blurring between asset classes, front-, middle- and back-office functions, and geographic markets.
To more closely align its offerings with an evolving marketplace, Trading Technologies is advancing its “multi-X” factor, with X representing asset class, function and region.
Traders Magazine caught up with TT Chief Operating Officer Justin Llewellyn-Jones (“JLJ”) to learn more.
What compelled you to join Trading Technologies in early 2024?
There were three main trigger points for why I joined TT.
The first was TT’s vision and strategy.
TT has been a leader in the futures and options markets, particularly in execution, for 30 years. While this remains a core focus, our vision has expanded to what I call “multi-X.” This means we are evolving our platform and network to be multi-asset, multi-geography, multi-workflow, and multi-function.
Financial services software developed in the 80s, 90s, and 2000s was typically designed for a specific business purpose, such as trading equities in the US, providing compliance in Europe, or clearing futures in Japan. While this approach met specific business requirements with targeted technology solutions, it led to inefficiency and duplication, because many of these solutions fundamentally perform the same functions, resulting in a fragmented ecosystem.
Keith Todd, TT’s CEO, has always envisioned consolidating trading solutions into a single platform and streamlining front-to-back trade processing. By using multi-X solutions to reduce fragmentation, risk, and cost, his goal has been to drive both efficiency and productivity. Keith’s vision has been a broader industry theme for many years, and I share it. I believe TT is best positioned to execute on this vision, acting as a catalyst for electronification and automation by enabling all asset classes to utilize the most optimized tools and workflows.
The second trigger point was the underlying technology.
I’ve been building solutions for the financial services industry for three decades, and I know that legacy technology is deeply entrenched in capital markets. Some solutions still in use were built as far back as the 70s and remain on mainframe technology. While the old adage “if it ain’t broke, don’t fix it” has its place, legacy technology makes it harder to leverage advancements like AI and cloud computing and to embrace the open, componentized ecosystems that are now standard.
As many people know, TT underwent a massive technology modernization program between 2011 and 2021, becoming one of the first vendors to embrace the Cloud. While there were certainly challenges and setbacks along the way, and we continue to enhance and optimize the platform with ongoing initiatives, we now have a cloud-native, componentized, and service-oriented architecture that allows us to take full advantage of current technological advances. This architecture also enables us to provide the open ecosystem that our customers want and readily integrate third-party solutions.
At some point everyone sitting on legacy technology solutions is going to have to go through the same modernization process, so joining an organization that had put the time and effort into modernizing their technology stack was incredibly attractive to me.
The third trigger point was the people.
The TT team is truly exceptional, composed of dedicated and hard-working individuals who are laser-focused on our customers and share a common goal: to build products that not only meet but exceed customer expectations, fostering growth and success. Furthermore, they are committed to providing outstanding customer service, and continually improving service excellence.
How could I not join TT when I saw that it had the right vision, the right technology and the right people?
We’ve discussed data/analytics, algos/quant trading, and compliance/surveillance with TT leaders previously. What is the importance of such areas and how do they fit under the multi-X umbrella?
Our goal is to provide comprehensive support for the core trade lifecycle across all asset classes and jurisdictions. This encompasses areas such as execution, order management, risk management, middle office, and clearing. Additionally, we recognize the critical importance of adjacent activities such as margin management, trade surveillance, trade and transaction reporting, real-time quantitative analysis for algorithm optimization, and so on. These interdependent elements must all operate seamlessly to deliver the highest levels of straight-through processing for our customers. When properly implemented, they also generate holistic data insights and feedback loops, enabling customers to continuously enhance their trading activities.
The lack of interoperability between different solutions is a real obstacle. For instance, in trade surveillance, many firms currently use multiple solutions to monitor their trading activity across various asset classes and regions. These solutions are usually linked to separate execution solutions. If you have a multi-asset execution solution that is integrated with a multi-asset surveillance solution, you can use surveillance models that are not only single-asset and multi-asset, but also single-market and cross-market, and single-product and cross-product.
That’s the essence of what we’re trying to do with multi-X. It’s not just about multi-asset execution, it’s also about these adjacent activities, where if you bring it all together, you get a much better oversight of your activity while reducing risk and cost, and an ability to really optimize.
What is the importance of interconnectivity in this context?
Many firms employ trading strategies that cover multiple asset classes, even if only for hedging purposes. So asset class interconnectivity exists and has always existed. What TT is doing is eliminating the “swivel effect” of having to interact with multiple solutions, and making it that much easier for people to execute their trading strategies efficiently. I think of this as horizontal interconnectivity.
The other vector of interconnectivity is vertical, occurring across the trade lifecycle and value chain. Modern, componentized solutions with higher levels of interoperability allow firms to build their own ecosystems, even building new or modernizing existing solutions. As the trade lifecycle evolves and shortens, as seen with Equities and T+1 settlement or Treasuries and centralized clearing, firms require this agility.
With our multi-X strategy, TT is well-positioned to assist firms with these needs and evolutions. Additionally, we can enable modernization programs by allowing firms to leverage our platform, network, and distribution.
TT will be represented at next week’s FIA Boca, which turns 50 this year. What’s the importance of this event?
The FIA does a fantastic job of bringing the industry — banks, brokers, buy-sides, vendors – together for constructive discussions and to make progress on optimizing the market structure, and they deserve kudos for what they’ve achieved since their founding in 1955. Over the last 50 years the FIA Boca event has brought together all of the players in the industry for a few days every year to discuss the most compelling issues.
With TT’s 30 years of working in futures and options, FIA Boca has a special place in our hearts when it comes to everything we have achieved so far, and will continue to be where we engage with our customers and the broader industry to discuss our collective vision for the future.
