Simon Dove, Managing Director and Head of Liquidity, EMEA discusses his new role and how he plans to help clients find deeper pockets of liquidity.
Simon Dove joined Instinet Europe Ltd in December 2020. He has over 20 years’ experience in the securities industry and has worked effectively with institutional trading participants across a variety of asset classes and venue types. Prior to joining Instinet Europe, Dove spent four years with electronic liquidity provider (ELP), Tower Research Capital. His prior experience includes six years with Sun Trading and ten years at the London Stock Exchange. Dove is a frequent industry speaker on subjects related to market structure, the trading life cycle, and liquidity.
You recently started in the new role of managing director, head of EMEA liquidity strategy at Instinet. Can you please tell me about your role and any changes you plan in the next year or so?
I started in mid-December and the objective is broadly to grow European client activity across the different platforms. My plan is to gain a greater understanding of the business and work more directly with clients to understand their needs in terms of execution, data analytics and post trade. Although Instinet is a global agency broker and I will be collaborating globally with my colleagues, I will focus more on Europe and will look at how we can improve the liquidity and add value across the platforms. This includes our own Blockmatch (a continuous dark MTF for European equities) and BlockCross (a conditional order management platform that aims to help clients manage large-in-size orders with post-trade services, commission management and liquidity profile features). This complements our EMS, Newport, and our analytics suite, which provides pre-trade, real time, and post trade analytics to clients.
What has been the impact of Covid? What lessons have been learnt?
The challenges in some ways are no different than in pre-Covid times. For example, fragmentation of liquidity, visibility and quality data remain the main issues. However, clients experienced a great deal of volatility during the pandemic especially last spring, and it was a credit to the technologists like our own who developed sophisticated systems and scale that were able to deal with the significantly higher volumes.
In terms of lessons learnt, I think in general terms, it demonstrates the importance of technology and how it can be a scale enabler. It is not only an important part of trading but also the lifecycle of a transaction and risk management. For us as a firm we were able to continue deploying and maintaining our services to our clients and we will continue to look at how we can enhance the levels of functionality available, going forward.
How did you think the industry adopted to remote working and what was like it for you to start a new job remotely?
The pandemic has underscored the personal nature of the industry. I am very supportive of the culture change as senior managers and managers have done a good job reaching out to employees and to make time for personal conversations. The industry also found different ways to engage virtually but, in my view, nothing replaces discussing things in person around the table.
As for my own situation, it was a challenge, but I always like a challenge. I met everyone through email, zoom, chat rooms and phone calls. Also, my team in London and globally are very collaborative and this substantially eased the process. It helped me personally to integrate and become effective despite the remoteness.
How do you envision the office of the future which is today a much-discussed topic?
Again, technology will be an enabler and I think there will be more integration of tools on the desktop real estate if traders are working more from home. However, flexibility will be the key and clients will dictate the types of tools that they need. Our role is to understand and deliver the systems while providing consistency and quality. Instinet is one of the original fintechs, having recently celebrated its 50th anniversary. We have a long track record in delivering technological solutions that can benefit the client and we will continue to do so going forward.
What has been the impact of Brexit?
Instinet is one of the largest agency franchises with a global footprint across multiple regions and jurisdictions. As a result, we approach Brexit in the same way. The team executed a plan last year and added a German entity to ensure we serve our European clients in a seamless way.
Do you think there will be a bifurcation of regulation? Already the Financial Conduct Authority is easing restrictions on dark trading and double volume caps.
We are mindful of divergence and the possibility of further fragmentation of liquidity, but it is too early to suggest that will happen. We all need more guidance, but it is a credit to the industry that it has seamlessly embraced the transition and has been able to service the day to day needs of clients.
What role is technology playing and what tools are essential today to navigate the liquidity landscape?
What we are seeing is through use of our analytics platform is that the demand remains significant and will continue to be a key driver for clients. They want a clearer picture of the marketplace which means having real time analytics and data to generate actionable insights and decisions. I also see an increase in the use of cloud technology in terms of processing the sheer volumes of data. Through Newport, we are seeing greater demand for embedded analytics and hosted solutions.
What technology do you think will play an important role in the future? What is Instinet doing to meet the challenges?
I think going forward there will continue to be a focus on advanced computing and technology to expand growth and improve efficiencies. I see greater use of machine learning and AI to provide more customised solutions for clients. Clients also want better clarity and quality of analytical data to make more informed decisions throughout the lifecycle of the transaction.
Instinet is in a unique position because we deliver customised technology built in house which allows us to be close to our clients and deliver what they want. We are configured to offer our clients’ customisation, quality, and output but one of the important things is we also have a broad portfolio of services surrounding the trading life cycle, which gives them optionality and choice.
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