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Saturday, March 15, 2025
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Technology is the Backbone of Modern Trading

By
Anna Lyudvig
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Artificial Intelligence (AI) and Machine Learning (ML) were recognized as the most influential technology for trading for the third year in a row, according to J.P. Morgan’s E-Trading Edit survey.

According to Patrick Whelan, head of FICC Digital Markets, AI and machine learning topped the list of technological advancements expected to impact the industry in 2025. “AI and machine learning came out on top once again,” he said, underscoring the pivotal role these technologies will play in automating processes, improving efficiencies, and driving innovation across the financial sector.

Source: J.P. Morgan

In the latest episode of Market Matters on J.P. Morgan’s Making Sense podcast, Patrick Whelan and Gergana Thiel, global co-head of Macro Sales, discussed this year’s survey findings.

The conversation centered around how technology, particularly advancements in AI, ML, and e-trading, is reshaping the trading landscape and influencing market participants’ strategies and predictions.

J.P. Morgan has been at the forefront of investing in these technologies, as Whelan noted. “We’ve already invested a lot in that space, and we continue to do so. We’re looking to leverage the data we have to drive more efficiencies and automate more of our processes,” he explained. While the firm continues to explore how to create commercial value from AI, the long-term potential for AI to revolutionize trading is clear. “I think we’re still learning about how we can create commercial value through the use of LLM and large-scale AI efforts, but by 2025, we’re going to see more of that coming into the day-to-day of both our sales traders and clients.”

Another key insight from the survey was the unanimous agreement among respondents that e-trading will continue to grow in 2025. “It was the only part of the survey where we had 100% agreement,” Whelan revealed. This signals a strong industry-wide shift toward digital platforms and highlights the need for firms to continue innovating in e-trading solutions.

As Whelan pointed out, areas such as emerging market rates and credit will experience significant electronification in the coming years. “They were pointing to EM rates and credit as being two of the areas that will continue to grow in terms of electronification in 2025,” he said. For J.P. Morgan, this represents a key investment focus, and the firm is committed to expanding its e-trading offering worldwide.

In line with growing demands for seamless digital trading experiences, J.P. Morgan is looking to develop new solutions that integrate technology more effectively with client needs. Whelan emphasized the importance of offering robust direct API solutions across asset classes. These solutions enable better connectivity with clients, making it easier for them to access liquidity and data in real-time.

“These types of solutions allow us to provide more competitive pricing, better analytics, and ultimately reduce information leakage,” Whelan explained. By continuing to enhance their single dealer platform, Execute, J.P. Morgan aims to help clients achieve more efficient trading while reducing costs. “Reducing brokerage and execution costs is an important focus area for 2025,” he added, noting how technology will continue to play a critical role in meeting this objective.

Gergana Thiel

A critical aspect of technological advancement discussed in the podcast was the increasing demand for real-time data and analytics. Thiel noted that clients are increasingly relying on instant access to large data sets to make informed trading decisions. “Real-time data and analytics has become central to the investment process and the way clients engage with the market,” she remarked.

Whelan agreed, emphasizing that J.P. Morgan is focused on delivering better analytics and more innovative solutions to meet client needs. “Working with large data sets and providing real-time data both to our sales and traders as well as to our clients is a continued focus,” he said. However, he also acknowledged the challenges in some asset classes that are still transitioning toward full electronification. “In certain asset classes, it’s much more highly developed, but in others, we have to come up with more innovative analytics that clients are looking for,” he explained.

As the trading world moves toward more sophisticated data consumption methods, Whelan noted the need for both visual and API-based delivery systems to ensure that clients have access to the information they need when they need it.

As the conversation drew to a close, Whelan and Thiel shared their predictions for 2025 in three words. Whelan’s key terms were “data, connectivity, and growth.” “Data” reflects its crucial role in decision-making, while “connectivity” highlights the firm’s commitment to enhancing digital platforms and fostering better connections between clients and markets. “Growth” encapsulates the ongoing expansion of e-trading solutions across various asset classes.

Thiel, on the other hand, chose “tariffs, technology, and the U.S. dollar.” She highlighted how tariffs will continue to shape the global market outlook, while technology remains at the core of the trading transformation. Thiel also pointed to the U.S. dollar’s significance in signaling market sentiment.

Canadian Markets: Insights from Dan Kessous, CEO of Nasdaq Canada

By
Anna Lyudvig
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As the Canadian markets moved through 2024, various factors influenced trading patterns, market policy and investment activity. According to Dan Kessous, CEO of Nasdaq Canada, a combination of macroeconomic factors, regulatory changes and product innovation drove notable developments.

Kessous is responsible for the Nasdaq Canada Exchange’s strategy and oversight of its business and operational functions. He joined Nasdaq in 2016 through the acquisition of Chi-X Canada ATS where he worked since its inception and became CEO in 2011. In a conversation reflecting on the past year and looking forward to 2025, Kessous outlined key trends that shaped the market environment and what lies ahead for Nasdaq Canada.

Macroeconomic Backdrop and Market Activity

Dan Kessous

From a broader economic perspective, 2024 marked a year of transition. The backdrop was shaped by high inflation levels and subsequent actions by central banks, including the Bank of Canada.

Central banks, across the globe, began adjusting their strategies to address inflation. “This was the year of a pivot in terms of trying to fight inflation from all the central banks, not just the Fed in the U.S., but London, Europe and Canada,” said Kessous. A significant aspect of this effort was the policy around interest rates, where central banks moved towards decreasing rates. This had a strong impact on market activity, as it fostered optimism in the markets and led to increased trading volumes.

For Nasdaq Canada, the results were promising. The exchange saw a 12% increase in overall volumes year-over-year, a positive trend considering the high trading levels of previous years. Several events contributed to this uptick, including key actions by central banks and strong results from major tech companies; “in August, we saw an uptick in volume and volatility driven by results for the FANGs, the big tech companies,” Kessous shared. Additionally, the decision by the Bank of Japan to raise rates and the Federal Reserve’s stance on interest rates had ripple effects in global financial markets.

Regulatory Landscape in Canada

In 2024, Canadian regulators focused on maintaining a competitive and transparent marketplace. The year saw regulatory attention on both market structure and market data. Kessous pointed out key developments on the regulatory front, particularly in the context of cross-border trade between Canada and the U.S.

A significant regulatory theme was the U.S. Securities and Exchange Commission (SEC)’s proposed market reforms, especially around tick sizes and fee caps. “There are a lot of stocks that are dual-listed and trade cross-border. It’s a big portion of what’s happening in Canada, and those are also important names that trade in the U.S.,” Kessous explained. Canadian regulators aimed to align their policies with U.S. regulations to ensure the competitiveness of Canadian markets.

Another major focus for Canadian regulators was market data. Kessous acknowledged the growing interest in how market data is priced and accessed, particularly for retail investors. “There’s been a lot of work done in Canada by our regulators to improve how market data is distributed and how it’s

priced,” he said. A consultation paper on the matter received diverse feedback from market participants, and as a result, regulators decided to push the consultation further. “They created a couple of working groups with industry people that would participate in that group and try and resolve it in a gently managed manner.”

Nasdaq Canada’s Product Innovation: A Focus on PureStream and Block Trading

A major highlight of Nasdaq Canada’s achievements in 2024 was the growth of its PureStream product. This order type, introduced on Nasdaq Canada’s dark pool, CXD, was designed to offer market participants a more passive way to execute trades based on a trajectory of market volume.

The PureStream product has been successful in attracting users, growing steadily since its launch. Kessous noted that Nasdaq Canada spent considerable time gathering feedback from customers to refine the product. “We spent the first part of last year engaging with customers, taking the feedback… and towards the second part of the year, we made further adjustments to the product.” The results from these improvements were promising, with significant volume growth in early 2025.

PureStream is part of a broader strategic initiative for Nasdaq Canada to expand block trading in Canada. Nasdaq has been working on connecting various liquidity pools within its CXD dark book. “We are launching a project to connect all these pools of liquidity together… PureStream Connect, that connects the conditional orders to PureStream,” Kessous elaborated. By enabling participants to interact across different liquidity pools, Nasdaq Canada is enhancing its offering in block trading.

In addition to product innovation, Nasdaq Canada placed a strong emphasis on performance and resiliency. The rise in volume and volatility over the past few years prompted significant upgrades to Nasdaq Canada’s technology and infrastructure. “We continue to invest in performance. It’s hardware, but it’s also software,” Kessous emphasized. In response to increased traffic, Nasdaq Canada has also launched a new recovery server for market data to ensure quick snapshots of market conditions.

Looking Ahead: Trends and Priorities for 2025

Looking into 2025, Kessous anticipates that many of the same regulatory and market-driven trends will continue. One key issue for the year ahead will be the ongoing discussions surrounding the SEC’s proposal to alter market structure, including changes to tick sizes and fee caps. “Our regulators want to be ready, should it go forward… and try to do it in sync with the U.S.,” Kessous shared.

Other anticipated regulatory changes in 2025 include proposals to adjust Canada’s short sale regime and further efforts to adapt market data distribution systems. Kessous also highlighted the growing role of artificial intelligence (AI) in market surveillance and product development. “AI has been a big focus for Nasdaq,” Kessous noted, adding that the firm is working to incorporate AI into various aspects of its operations, from fraud detection to enhancing internal productivity.

From a product standpoint, Nasdaq Canada will continue to prioritize the growth of PureStream and work on improving its block trading capabilities. Furthermore, the company aims to enhance its smarter router technology, which is responsible for a significant portion of the trading volume in Canada.

Nasdaq Canada’s Position in the Global Marketplace

As for the competitive landscape, Kessous highlighted that Canada’s financial market remains competitive but faces challenges, particularly from the U.S. “Canada is already a very competitive market, locally, we have probably 15 marketplaces all competing for the same pie,” Kessous said. However, he also noted the increasing challenge posed by the dual listing of stocks between Canada and the U.S., where U.S. exchanges have seen a rise in market share.

To remain competitive, Kessous emphasized that innovation is key. “We need to keep innovating and keep listening to clients,” he asserted. For Nasdaq Canada, staying competitive means building a robust infrastructure, expanding product offerings and maintaining a focus on fairness, transparency and resiliency in all its operations. Looking forward, the company is well-positioned to continue its momentum in 2025, with a sharp focus on emerging technologies like AI, block trading and maintaining a resilient, competitive marketplace. “As the financial landscape continues to evolve, Nasdaq Canada’s ability to adapt and innovate will be critical in ensuring its ongoing success.”

STAC’s Lauren Arbid Named to Security Traders Association Board of Governors

By
Press Release
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CHICAGO, IL, Feb. 19, 2025: The Security Traders Association of Chicago (STAC), a membership organization for individual professionals in the securities industry in Chicago and an affiliate of The Security Traders Association (STA), today announced that 2024-2025 STAC President Lauren Arbid has been named to the STA Board of Governors. The prestigious appointment reflects Arbid’s long-term commitment to the securities industry and her leadership role within STAC and the broader community.

The STA Board of Governors is comprised entirely of volunteers serving from different regional affiliates and aims to represent the diverse perspectives from multiple regions and market segments within the financial services industry. The Board is responsible for overseeing STA’s direction, policies, and decision-making at the national level and advocating for the interests of its members within the industry, particularly regarding market structure issues and regulations. 

A 10-year member of STAC, Arbid has played a critical role in advancing STAC’s mission of education, professional networking and philanthropy. Her extensive experience and commitment to the industry make her a valuable addition to the STA Board of Governors, where she will contribute to shaping policies and initiatives that impact security traders nationwide.

“I am honored to join the STA Board of Governors and have the opportunity to collaborate with these amazing industry leaders to help drive meaningful progress across the STA community,” said Arbid. “I look forward to advocating for the interests of our members and working toward solutions that enhance market integrity and efficiency.”

STA is a bipartisan organization that serves individuals employed in the financial services industry. Comprised of more than 15 affiliate organizations across the United States and Canada, STA advocates on behalf of and fosters collaboration among its members, while also representing their interests with legislators, regulators and other industry organizations.

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About Security Traders Association of Chicago

Established in 1925, the Security Traders Association of Chicago (STAC) is comprised of 600+ professional trade industry members who are engaged in the buying, selling and trading of securities. It is an affiliate of The Security Traders Association (STA), a leading trade organization for individual professionals in the securities industry that works to improve the ethics, business standards and working environment for its members. With a mission of education, professional networking and philanthropy, STAC hosts conferences and events that promote professional development, serve as a platform for influential leaders in the industry and offer an unmatched forum for networking. To learn more about STAC, please visit www.stachicago.org.

AI is Now a Need, Not a Want for Meeting SEC Regulatory Reporting Requirements

By
Confluence
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By Laurent Louvrier, VP of Product, Artificial Intelligence at Confluence

The SEC’s introduction of new regulations over the last few years, including the Shareholder Reporting Rule, has meant increased reporting obligations for firms without a corresponding increase in the time, money, and human capital required to meet these obligations.

Firms are under pressure to have the right data and systems in place, leading to rising costs and resources at a time when many firms are also grappling with an overwhelming volume of unstructured data.  To source, structure, arrange and report on this data is a significant undertaking given the amount of data teams need to parse. It’s becoming unfeasible for firms to tackle this using their traditional technologies.

New technologies like Gen AI and LLMs allow the automation of manual tasks like checking, reconciling, translating, and reasoning about information that cannot be easily handled by traditional technologies due to the nature of unstructured data. To use the SEC’s Tailored Shareholder Report requirements as an example, manual reconciliation to meet this requirement on or after July 24 may take a typical manager hundreds of business days to reconcile the reports each time. Firms must do this within a 60-day window, which becomes operationally impossible.

Advanced AI models are now capable of mining and pinpointing discrepancies in language and numeric information between financial reports and the TSR, automatically parsing data from third-party financial reports, and interrogating and reconciling it within seconds leading to a 90% increase in efficiency. This directly addresses the key challenges our clients face with data reconciliation and compliance validation under tight deadlines. These solutions convert complex unstructured data into valuable insights, reducing what would typically take weeks of manual work into a streamlined process that delivers significant efficiency and cost savings. While there’s still human oversight needed in all of this, AI can radically improve the efficiency of information and dissemination in financial reporting and compliance.

So, what’s holding firms back from using AI? Largely it has been resistance to change and the perceived risks regarding data privacy and security. To ease any concerns, I would first say companies should examine their business processes to evaluate where they allocate their time and resources and how AI can transform these areas to gain efficiency. A better understanding of business priorities and processes will help make decisions on where to start to leverage AI. While some organizations may have the capability to develop AI solutions internally, it often makes more sense to partner with established vendors who have the business process and AI expertise that can bring proven immediate business value.

As new regulations with more arduous reporting requirements arise, demanding greater time and resources, it will be especially important for firms to replace tedious manual validation processes and embrace productivity-enhancing technologies or risk being left behind. By leveraging AI, investment compliance operations can streamline SEC reporting processes, enhance compliance, and mitigate regulatory risks more effectively.

Adapt to Survive – How Modular Deployment is Transforming Legacy Systems

By
Quod Financial
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By Medan Gabbey, CRO, Quod Financial

This is the second article in our multi-part series on industry themes, following Why your Legacy OMS is costing you more than you think? published on February 5, 2025.

Medan Gabbey, Quod Financial
Medan Gabbey, Quod Financial

Change is inevitable—and often difficult. When buy-side or sell-side firms attempt to address legacy technology, they typically uncover outdated, poorly documented systems with outdated integrations. The common approach of “If it ain’t broke, don’t fix it” leads to obsolescence – much like species that, through natural selection, failed to adapt to their changing environment (sorry, Dodo).

The Trap of Analysis Paralysis

One of the biggest obstacles to modernization is analysis paralysis. Extensive audits of existing processes, often involving external consultants, rarely yield practical outcomes. These lengthy and expensive reviews frequently delay action rather than facilitate meaningful change.

While consultants can play a role, relying on them to analyze internal systems can sometimes be an excuse to defer responsibility, rather than creating a roadmap for success. Even worse, framing technology decisions around solving yesterday’s problems only increases the risk of Darwinian peril.

The Real Secret to Success

The key to success is surprisingly simple. Start with a vision for the future—not an autopsy of the past. Just as buying a new car doesn’t require a detailed analysis of your old one, transforming trading technology starts with a vision for the future.

Ask yourself: What should your trading technology enable? What capabilities should it provide? How should systems and people interact with it? Defining this future state will help you select a vendor that aligns with your goals. This allows you to focus on building the new system while selectively migrating valuable components from the old one.

A successful transition doesn’t require an in-depth understanding of legacy technology—it requires a roadmap for the future. Importantly, your target system should support a staged migration, enabling incremental adoption without disrupting operations.

The Power of Modular Applications

The ideal solution is modular. Instead of attempting a massive overhaul, implement the smallest viable project within your existing infrastructure. The system should provide clear value for every specific workflow, allowing legacy features to be addressed or retired gradually.

This approach can be tailored to individual functional areas—such as algorithms, Smart Order Routing (SOR), middle-office workflows, and market-making—or to specific trading desks and flows, including portfolio trading, convertible bonds, and DMA.

When evaluating modular solutions, firms should consider: Can the system integrate with existing static data? Are real-time APIs available for every function? Does it align with a broader technology strategy? (See Article 3: Leveraging Microservices in Modern Trading, coming on March 5th.) More importantly, does it future-proof workflows, reduce complexity, and allow firms to decommission redundant systems? Finally, is the vendor offering a truly unified technology, or merely a collection of disconnected solutions under one brand?

The right modular approach ensures that firms can replace multiple existing systems, preventing further complexity.

Buy-vs-Build Dilemma: A Common Pitfall

Building OMS/EMS functionality in-house is a monumental challenge. These systems involve years of building complex functional requirements and require ongoing maintenance to remain competitive. Many firms initially define success as “building exactly what we need today”—but a more realistic question is: Are we prepared to maintain and evolve this system for the next 20 years? Redefining success changes the success-criteria in the Darwinian landscape.

The limited number of vendors in the market reflects the complexity of trading technology. If external companies struggle to thrive in this space, in-house development will likely be even more costly and will risk falling behind industry innovation.

The optimal approach is “Buy-AND-Build.” — leveraging a vendor’s proven API infrastructure while tailoring it to your firm’s needs. This is like customizing an existing car rather than rebuilding the engine.

When selecting a vendor, firms should assess whether their API and data model support a Buy-and-Build approach and examine how the vendor is innovating. The key to long-term adaptability and success lies in outsourcing core technology while maintaining flexibility for customization where it truly matters.

Future-Proofing Your Trading Systems

This article provides a high-level overview. The path from legacy to modern systems involves vision, focus and investment in the future — not the status quo. Firms that select a vendor aligned with their end-state vision and adopt a modular, incremental approach will achieve most cost-effective and sustainable modernization. This approach also presents better opportunities to monetize all the workflows within their firm and deliver better outcomes for their clients.

From Bakeries to Brokerage: Kristin White’s Unique Career Journey

By
Anna Lyudvig
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As CFO of Fidelity Brokerage, Kristin White plays a key role in driving growth, innovation, and financial stability in a rapidly evolving industry. In an exclusive interview with Traders Magazine, she reflects on her unique career journey—from working in her family’s Italian bakeries in Massachusetts to navigating corporate roles and ultimately leading the finance division at Fidelity.

Kristin White

Please tell us about yourself. Can you share some key milestones or turning points that helped shape your path to the role you have today?

I grew up working in my family’s business (Italian bakeries in Massachusetts). I worked there as a kid, going to the bakery early with my dad, and continued working there during holidays and weekends throughout college. I ended up spending 6 years there after I graduated college. During that time, we grew the business from 1 store to 4 stores with 150 employees. I also pursued my MBA at night while working at the bakery during the day.

I had a few corporate roles between my time at the bakery and coming to Fidelity, where I’ve now been for about 18 years. I’ve had the great opportunity to work across many of Fidelity’s business units, including in our insurance business, enterprise strategy and retail distribution before becoming the CFO of Fidelity’s Capital Markets division. This was a fantastic learning experience – it was an area that I didn’t know much about prior to taking the role, and it is a fascinating business. It also helped provide a great foundation for my current role as CFO of Fidelity Brokerage.

Coming from a small business, I really adopted an owner mindset which includes an end-to-end way of thinking. When you’re working in a small business, you touch all aspects, from the leasing to HR to benefits to the customer experience, and it instills in you a culture of accountability and ownership. And Fidelity has that culture and really reflects those same principles of maintaining an enterprise perspective and a long-term view of what success looks like.

What experiences or lessons from your career have had the most impact on your approach to leadership and decision-making in your current role as CFO?

As a leader, it’s critical to remember that people can (and do!) change, and they deserve the opportunity to demonstrate that. I’ve found that we tend to remember only certain parts of our interactions with somebody, whether negative or positive. But your original perspective of someone shouldn’t be something that clouds your future interactions with them. Especially as a leader, you should give people the opportunity to show that they’ve grown or changed. I’ve certainly been given that opportunity and I’ve always appreciated it. As a result, this is something I prioritize in my own interactions and as part of coaching and mentoring others.

Fidelity Brokerage has grown significantly in recent years. What key strategies have you implemented as CFO to support this growth, and how do you prioritize long-term financial stability?

When it comes to decision making, it’s so important to make sure your teams understand the overall business strategy and how their work aligns to and supports that strategy. By doing so, your teams will be better positioned to help drive your mission and priorities if you take the time to explain where you’re headed and why.

I believe my role as CFO is to help the business make good, fact-based decisions by clarifying the objective and outcome we want to achieve, as well as the “countermeasures” – the potential unintended consequences of any decision. At the core of our decision making is always our customers – how can we support them, deliver an exceptional experience and help meet their evolving financial needs.

As a female leader in a traditionally male-dominated field, what has been your experience navigating your career in finance, and what advice would you give to other women aspiring to leadership positions in the industry?

I’ve been fortunate to have built my career at Fidelity, which is a place with a diverse group of leaders and plenty of opportunity. I would suggest to anyone looking to be a leader to find a company that shares your values and has a culture that fits your goals and leadership style. Fidelity has a long history of innovation, customer obsession, doing the right thing, and maintaining a long-term view – all things that are important to me.

My advice to women looking to be leaders in the financial industry is to set goals and make a plan to achieve those goals. Don’t be afraid to pursue new areas if they could help you get closer to your goals. Throughout my career, I’ve looked for opportunities that have allowed me to leverage my strengths, but also allowed me to learn and do something new.

Don’t be afraid to take risks- but make sure you’re taking smart, intelligent, and calculated risks. Especially when you’re early on in your career, take advantage of the opportunities that will give you a chance to stretch and grow.

Last, make sure to advocate for yourself. Actively manage and seek out your next move, looking for the opportunities that will help you grow in order to achieve your next goal. A great way to do this is by reaching out to colleagues in different roles or other areas of the organization that may interest you – you never know what might come from a conversation!

Fidelity’s reputation for employee culture is strong. How do you, as CFO, contribute to cultivating a culture of innovation and accountability within the organization?

Innovation and accountability really go hand-in-hand. With a strong cultural foundation where associates feel pride of ownership for their work, we can think bigger and look forward to identifying opportunities to innovate and improve our business.

Because the finance organization is deeply embedded within the business, we are uniquely positioned as a partner to help our business leaders make strategic decisions that capitalize on opportunities for innovation and growth, with customers and their needs always at the center of our strategy.

It helps that Fidelity leaders regularly spend time with associates throughout the organization, building a shared understanding of how our individual work connects to the broader business strategy. We also see a strong connection between our client-facing teams and our business leaders, which helps us ensure our work is prioritized to meet current and future customer needs.

Looking ahead, what do you think the future holds for the brokerage industry in the next 5-10 years? What steps is Fidelity taking to stay at the forefront of these changes?

I’m energized by the opportunities ahead in the brokerage industry, and feel privileged to be a part of Fidelity’s journey supporting self-directed investors through the changing landscape. The pace of change in how traders access markets and invest over the last two decades has been unparalleled, and I expect this will only continue. My colleagues and I at Fidelity will continue to listen to and understand the needs of our customers as they navigate new investing opportunities, faster access to information, and near-instant reactions by the markets to global events.

How does Fidelity support investors throughout different phases in their financial journeys?

We know that every investor’s journey looks different, and that insight is really critical to how we design our offerings. Fidelity is uniquely positioned to support all investors, no matter where they are on their journeys, thanks to the breadth of our business. Whether someone started out investing with their workplace retirement plan and are now ready to save and invest outside of a retirement account, or they’ve been trading for years and need the next best platform for advanced charting, our retail teams are dedicated to meeting those needs.

As you continue to grow in your career, what are some areas you’re focusing on personally to continue evolving as a leader and CFO?

I always want to be learning and listening. I’m a big advocate of developing a personal learning agenda that helps deliver what you need to be successful, which can be helpful both in your personal and professional life.

In the near term, I’m focused on remaining customer obsessed. It’s so important to find ways to stay close to the customer, whether spending time directly with customers or customer-facing associates to make sure we’re delivering value for them. I personally spend a few hours every month joining calls with customers so I can hear directly from customers about what they want and how we can help them, and I encourage my team to do the same.

I’m also committed to mentoring and coaching associates throughout the organization. I’ve been fortunate to have great mentors throughout my own career and this is something that I think is critically important as a leader – taking time to invest in the development and growth of future leaders.

People work hard and bring so much energy to their work – it’s critical to recognize and share appreciation for their contributions as often as possible.

Buy Side Warms Up to FX Algorithms

By
Editorial Staff
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360T, a foreign exchange trading platform and technology provider, and Quantitative Brokers, a provider of algorithms and analytics, recently announced that QB’s FX algos will be available via 360T.

Traders Magazine caught up with Matt O’Hara, CEO of 360T Americas, and David Kalita, QB CEO, at last week’s TradeTech FX USA in Miami to learn more.

Briefly discuss the value-add of the 360T-QB partnership?

David Kalita: This partnership unlocks additional value for FX market participants by enabling them to access advanced execution algos from an independent source via a market-leading trading platform where pricing from different counterparties can be put into competition to ensure best execution.

David Kalita, Quantitative Brokers

If you look at FX versus other asset classes, what’s unique is that you’re often trading on a disclosed basis against other counterparties or pools of liquidity and liquidity providers (LPs) are then looking to try and monetize that flow.

And so a common mistake people make is to put a very large number of banks in competition on a trade. You’ll get an excellent execution on that order, but then that LP will go and look at the profit from that trade and see that they basically earned nothing, or more likely lost, and then they’ll widen their pricing bands out over time. The result is that while you might experience tight pricing in the short-run, you’re going to lose out in the long-run by not having sustainable, quality liquidity.

One of the factors which make QB’s algos unique is that they take this into account. So in addition to ensuring optimal execution for the buy-side counterparty, we’re also looking at bank profitability, which is key to making sure that the liquidity pool remains sustainable.

What does this partnership add to 360T’s current offering, and why are you adding it?

Matt O'Hara, 360T
Matt O’Hara, 360T

Matt O’Hara: We developed this partnership in response to customer demand. QB has a strong pedigree in listed derivatives, and especially amongst large institutional buy-side firms. 360T has been growing rapidly and successfully partnering with many of these firms, where we see increasing demand for access to independent third-party algos alongside bank provided ones. So this collaboration aligns with our innovation and growth strategy, supporting the buy side’s increasing need for automation and diverse workflow optimization tools.

How does this announcement tie into the 2024 prediction — which Matt revisited in his Feb. 10 ‘From predictions to progress’ keynote at TradeTech — that buy-side firms will consider independent FX algos to complement their existing bank offerings?

Matt: At TradeTech FX USA last year we predicted a growing interest in third-party algo adoption, and 78% of surveyed buy-side firms agreed. The partnership between QB and 360T—where QB provides the algo logic and 360T supports the distribution—serves as clear evidence that this prediction has proven accurate and that clients are actively seeking to adopt this technology.

David: For context, FX algos have been around many years now. The space has grown quite a bit, but at the same time I think some clients are experiencing pain points that are not being solved by the current offerings in the market.

And that’s why clients have been engaging with us more in FX. We can understand their flow, customise and tailor the algos, and also innovate and adapt and grow with new strategies. We’re also rolling out new changes roughly every six weeks based on customer demand and our own research, so we’re able to be nimbler and more responsive than some of the other providers in this marketplace.

At the conference it was mentioned that three broad features of the FX market are scale, complexity, and rapid evolution. How does the 360T-QB news tie into this?

David: Regarding the complexity point, if you’re a buy-side firm, best execution is a big challenge. Just think about how fragmented the market is across all the different ECNs and the different pools of bank liquidity from the different banks – having to technologically connect to all those, understand all the different rule books, navigate market conditions, and manage all those relationships is daunting. And there’s also the matter of bank profitability.

Managing all that and abstracting the complexity from the end user is our specialty and we do it very well, enabling them to focus on the tougher parts of the workflow that are their specialty, like generating alpha, managing portfolios and dealing with their clients.

Matt: In terms of scale, 360T is a very large global business. We support over 2,900 buy-side firms, and within this segment institutional clients have been a real focus area for us and form a strategic pillar of our growth. We are also connected to over 200 liquidity providers globally, providing and distributing FX pricing. And we operate multiple execution platforms, including an award-winning Execution Management System (EMS) and our own in-house ECN, 360TGTX.

What this partnership does, by bringing together the capabilities of QB and 360T, is deliver synergies that scale very quickly across these different client segments and execution channels globally.

UK Retail Traders Eye US Markets

By
Press Release
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UK RETAIL TRADERS ARE LOOKING OVERSEAS FOR INVESTMENTS WITH THE US THE BIGGEST DRAW, REVEALS NEW STUDY

  • Nearly one in three invested more in shares listed outside the London stock exchange, study shows

UK retail traders are looking to foreign stock markets for investment opportunities, with the US as the biggest draw, new research (1) from GraniteShares, a global issuer of Exchange Traded Products (ETPs) with more than $9 billion under management, shows.

It found nearly one in three (30%) retail traders with investment portfolios increased the value of shares they bought last year that are not listed on the London Stock Exchange.

The survey reveals that 22% of traders increased their trading activity in the US, compared with 21% in the UK. However, 16% increased trading in European markets and 14% in Asian markets.

The trend looks set to continue this year with 25% planning to boost their trading in US markets ahead of 22% in the UK. Around 16% expect to increase trading in Europe and 14% in Asia as the table below shows.

Level of trading in market in past 12 monthsUKUSEuropeAsia
Increase21%22%16%14%
Decrease13%10%10%9%
Stay the same44%35%42%37%
Don’t know22%33%32%40%
Level of trading in market in next 12 monthsUKUSEuropeAsia
Increase22%25%16%18%
Decrease15%9%10%8%
Stay the same34%30%37%32%
Don’t know29%36%37%42%

The study found 41% of UK retail traders find it relatively easy to trade foreign shares after research, but 29% still face issues when doing so. Around a third (30%) are not interested in trading foreign shares.

Around two-fifths (36%) questioned believe they will trade more US stocks over the next two years as a result of the growing number of ETPs listed in London that enable investors to trade US and European stocks.

Catarina Donat Marques , Head of European Retail Strategy at GraniteShares, said: “The major stock success stories of the past decade have been largely concentrated in the US and that is increasingly attracting the attention of retail traders in the UK who don’t want to miss out.

Our ETPs, listed on London Stock Exchange, allow sophisticated investors to access easily and efficiently leveraged and short exposures on many of the most popular stocks, including US ones.”

GraniteShares offers a range of exchange traded products (ETPs) listed on national exchanges in the UK, Italy, and Germany. They consist of a suite of Short and Leveraged Single Stock Daily ETPs tracking some of the most popular companies in UK, US and European markets.

UK Leveraged Single Stock ETPs

Underlying stock+3x Long-3x Short
AstraZeneca3LAZ3SAZ
BAE Systems3LBA3SBA
Barclays3LBC3SBC
BP3LBP3SBP
Diageo3LDO3SDO
Glencore3LGL3SGL
Lloyds Banking Group3LLL3SLL
Rio Tinto3LRI3SRI
Royal Dutch Shell3LRD3SRD
Rolls-Royce3LRR3SRR
Vodafone3LVO3SVO

US Leveraged Single Stock ETPs

Underlying stock+3x Long-3x Short
Microstrategy3LMI3SMI
Coinbase3LCONA
Alphabet3LAL3SAL
Amazon3LZN3SZN
Apple3LAP3SAP
Facebook3LFB3SFB
Microsoft3LMS3SMS
Netflix3LNF3SNF
NIO3LNI3SNI
NVIDIA3LNV3SNV
Tesla3LTS3STS
Uber3LUBNA

Italian Leveraged Single Stocks ETPs

Underlying stockLong a levaShort a leva
Intesa Sanpaolo S.p. a3LSP3SSP
UniCredit S.p.a3LCR3SCR

Leveraged ETPs on the FTSE MIB Index

ProductISINTicker
GraniteShares 5x Long FTSE MIB Daily ETPXS25317675025MIB
GraniteShares 5x Short FTSE MIB Daily ETPXS25317677675SIT

Capital at Risk

GraniteShares ETP’s are only suitable for sophisticated investors.

-Ends-

Notes to editors:

  • Study conducted by independent research company Viewsbank among 1,015 UK adults aged 18-plus who hold or have held investment portfolios between January 17th and January 20th 2025 using an online methodology

For further information please call Phil Anderson at Perception A on 07767 491 519.

GraniteShares: A brief history

GraniteShares is an entrepreneurial ETP provider focused on providing professional investors with innovative, cutting-edge investment solutions. We believe the future of investing lies at the nexus of alternative thinking, low fees, and disruptive product structures—the core of our high conviction philosophy. Backed by Bain Capital Ventures, we launched our first product in 2017 and are now among the fastest growing ETP issuers with over $9 Billion in assets under management, as of 19th December 2024 spanning a full array of investment strategies.

This press release is issued by GraniteShares Limited. ETPs are issued by GraniteShares Financial PLC, a company incorporated in Ireland.

Investing in GraniteShares ETPs on U.S. listed stocks

Those trading GraniteShares new US leverage and inverse ETPs will not need to complete a W-8BEN form (US Department of the Treasury, Internal Revenue Service, Certificate of Foreign Status of Beneficial Owner for United States Tax Withholding and Reporting).

There is no margin requirement and losses cannot exceed the amount invested.

TECH TUESDAY: Off-Exchange Trading Increases Across All Types of Stocks

By
Phil Mackintosh, Chief Economist, Nasdaq
-

TECH TUESDAY is a weekly content series covering all aspects of capital markets technology. TECH TUESDAY is produced in collaboration with Nasdaq.

We recently talked about how off-exchange trading hit new record levels in 2024, topping 50%.

In fact, in November 2024, the U.S. equities market saw the first month ever where more volume executed off-exchange than on. Off-exchange volume share also stayed above 50% in December 2024 and January 2025.

Some think the increase in off-exchange volume is because of the rise in “sub-dollar” stock trading, which tend to be microcap stocks traded mostly by retail investors, suggesting that this is not a problem mutual funds need to worry about.

However, today’s data shows that’s not true. 

Off-exchange trading is high across the board

In fact, the rise of off-exchange trading is widespread, affecting lots of stocks that mutual funds are also trying to buy in large quantities. Off-exchange trading is over 45% for all market caps, including for stocks of all prices and exchange-traded funds. 

No matter how you slice it, off-exchange share is up significantly since 2019.

Chart 1: Off-exchange share has risen across all groups of stock since 2019

Off-exchange share has risen across all groups of stock since 2019

The rise is largely driven by bilateral trading – not dark pools

Interestingly, if we look separately at dark pools (ATSs) and other off-exchange (mostly bilateral) trading, we see that the dark pools market share has remained rangebound since at least 2019.

That means the growth is coming from firms filling spread crossing orders (often with price improvement) and negotiated trades. 

To be fair, much of this trading is retail, which has grown significantly since Covid and free commissions. But retail doesn’t account for all of the non-ATS trades printed off-exchange. 

Chart 2: Bilateral (non-ATS) has seen almost all the off-exchange share increase since (at least) mid-2019

Bilateral (non-ATS) has seen almost all the off-exchange share increase since (at least) mid-2019

Asset managers have less flow to interact with

Importantly, for mutual fund managers, these bilateral trades represent liquidity that they typically can’t interact with. 

You might think it’s just a few “retail darlings” pulling the averages up. But in fact, looking at all stocks in the Russell 3000 Index, we see that very few now have off-exchange share below 30% (or, said another way, on exchange above 70%). 

The majority of stocks see off-exchange trading between 40%-50%, and that’s true regardless of the stock price (horizontal axis) or market cap (circle size).

Chart 3: Accessible flow for asset managers 

Accessible flow for asset managers 

At the very least, that might mean buy-side orders using a “VWAP” or participation algorithm will actually be trading more aggressively in the market than they seem, which can increase the costs of trading. 

It may also add to search and signaling costs, as routers navigate the fragmented hidden liquidity, and opportunity costs as fills are missed.

It might be time to reduce regulations that create unnecessary fragmentation 

Lit prices, fair access and competitive NBBO are features that make stock markets different to other markets. U.S. households depend on a vibrant public equity market for their financial security. 

It’s possible regulators have taken for granted the prices that lit markets provide. Thanks to economics that favor dark over lit markets, lit market share has been falling globally.  

For institutional traders trying to navigate fragmented markets with large trades, fragmentation makes finding liquidity harder. Segmented markets mean there is less liquidity than a trader might think. Both can increase trade costs and reduce active mutual fund returns.

Research also suggests that companies with wider spreads will also have higher costs of capital, which will reduce their investment back into the U.S. and global economy. 

Academic studies indicate that there is a tipping point above which market quality and spreads get worse, potentially between 10% to 46.7% dark. The U.S. market has now breached all those levels.

Quantitative Trading Solutions Aims to ‘Hide the Footprint’

By
Editorial Staff
-

Joe Signorelli has had a front-row seat to the evolution of markets and trading for nearly four decades, starting in 1987 as a floor trader at the Chicago Board Options Exchange and progressing through multiple leadership roles in equity, futures and derivatives electronic trading, portfolio management, and product development.

Joe Signorelli

Traders Magazine caught up with Signorelli, EVP and Global Head of Quantitative Trading Solutions at Trading Technologies, to learn more about his current role and the state of play and ongoing evolution at QTS.   

How would you most succinctly describe Trading Technologies’ Quantitative Trading Solutions group?

QTS provides premium services to the trading community in the form of sophisticated multi-asset class execution algorithms to help minimize trading costs, and strategy development software to streamline the process of creating low latency systematic portfolio strategies.

We also have an options product called TT Uncovered, which helps agency desks find a Delta replacement for their large buy-side clients.

You were CEO and Co-founder of RCM-X, a technology provider of algorithmic execution strategies and quantitative trading products, when TT acquired the firm in March 2022. How has TT’s QTS group evolved since then?

QTS has leveraged TT’s global data center presence to broaden our global futures coverage and proximity hosting. We have integrated START, the broker-neutral trade optimization platform that we acquired last year from Abel Noser Holdings, broadening our coverage for equity execution algorithms. We are also working closely with TT’s growing fixed income and FX business lines to extend these solutions beyond our legacy listed derivatives clients to the spot and bond trading arenas.

It’s been fantastic since we came over three years ago. Our management, including CEO Keith Todd and COO Justin Llewellyn-Jones, is super experienced and has done great in leveraging our skill sets and our algorithms, effectively putting us on the global highway that TT has created and keeps expanding.

Our product coverage is global now. It was great to work in a smaller quantitative team at RCM-X where we came up with entrepreneurial ideas and did a lot of hard work, but coming into a bigger firm that’s also in growth mode has been a beautiful fit.

Who are QTS’s clients and what are their primary pain points in trading and algos?

Our execution algorithm clients run the gamut: proprietary trading firms, banks and brokers, CTAs and hedge funds, commercial energy and agricultural companies, and traditional asset managers and owners. These customers use our technology to more effectively source liquidity from technologically sophisticated market making firms, and to benefit from our broad insights into their execution quality. 

Our software solutions customers are more concentrated in the proprietary trading firm segment, where the software helps them streamline their processes and focus their R&D on alpha creation rather than infrastructure.

The software that we deploy allows groups to build their alpha trading, their portfolio trading. Our algorithms are co-located within the exchange to reduce their slippage.

Trading firms want to hide their footprint in the marketplace and they want algorithms to improve their trades and execution, so they can focus on other things. If you can’t deliver that as a trading services provider, no one is going to use you. It needs to be a cost-effective model that reduces slippage and gives trading firms multiples on the dollars they spend.

How does QTS differentiate itself in a crowded marketplace?

We differentiate through our expertise with low-latency trading technology, global co-located presence, and customer service excellence. We are one of very few independent execution algorithm providers that are not owned by a bank and not actively managed by an exchange, which lowers our conflicts of interest, and in that category we have unique scale and global presence.

Everything we do is on our C++ technology stack, whether we’re driving it through our TT infrastructure, or through our agnostic offerings through other independent software vendors – Fidessa, CQG, FlexTrade and others. That second part is a key component in that we can provide our benefits to trading firms who aren’t on TT, but maybe they will be in the future. 

Another way we’re different from many pure algorithmic technology groups is our people. I ran quantitative trading at TD Bank and also Stafford Trading, and I have experience as a floor guy, an upstairs guy and a hedge fund manager. Many people on our team also came up through those sides of the business, so we have a very good idea of what our clients are looking for. Yes, we provide great technology and great algos, but we also really know where they’re coming from, and we know their pain points.

What are QTS’s main initiatives currently?  

We are launching execution algo coverage for options on futures and FX, and we are evaluating new product opportunities in the fixed income space, under the leadership of Chris Heffernan, EVP Managing Director, Fixed Income at TT.  

We’re also putting a lot of emphasis on the equity space. Now that TT is a non-executing broker dealer, we can participate in the fee structure and do more on the equity side. We’re blending a lot of the intelligence from the Abel Noser START division into TT Strategy Studio, our end-to-end framework for creating advanced automated strategies for institutional multi-asset trading.

Also, we have provided execution algos to Lime Trading for more than 10 years and we can expand on that long-standing partnership.

What is the future of QTS?

We’re driving ever forward with cohesive, global, multi-asset class solutions. We’re going to continue to do this while completing the asset class solutions so that we can continue servicing global trading firms for all the different assets they trade.

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