We ask the head of multi-asset agency solutions at RBC Capital Markets about European equities consolidation, ETF algos and the growing role of AI.
Tell us about your role, and your time in the industry.
As European Head of Multi-Asset Agency Solutions at RBC Capital Markets, the primary focus of my role is to continue the growth of the electronic trading franchise in equities and coordinate closely with our teams across different asset classes. Prior to joining RBC in September 2023, I spent 17 years at Credit Suisse, most recently looking after the Advanced Execution Services (AES) Sales team in Europe.
What have you found most interesting in the agency solutions/electronic coverage space over the past year?
The continuous evolution of market structures across asset classes is always fascinating. The competitive landscape coupled with regulatory intervention and technology developments ensures that nothing stands still. Since May, European equities post-trade reporting has seen an overhaul as new exemptions came into play ahead of a potential consolidated tape. We can see that bilateral trade mechanisms such as Systematic Internaliser and Off-Book (On Exchange) are increasing, perhaps contrary to the desired outcome of the regulators and exchange operators. In other asset classes, we are seeing client demand for increased transparency, automation, and potentially more order book liquidity against the backdrop of banks and liquidity providers protecting their risk books. I’m looking forward to seeing how these trends evolve as the tape comes to fruition.
Most recently, we’ve been excited by some developments in the Exchange Traded Funds (ETF) space. There is a growing desire from some ETF issuers to encourage “on screen” liquidity and we’ve been partnering with some clients to build ETF algos that can provide liquidity on screen to save them spread costs, whilst finding sensible times to take far-touch liquidity. The liquidity of securities is often measured by trades carried out on screen and many investors will have investment constraints on illiquid securities, so this initiative has the potential to make the whole asset class more investable going forward.
What are the key themes shaping the industry?
Digital, Data, and Artificial Intelligence (AI) are always front of mind. AI is going to bring significant efficiencies to the financial services industry, and we need to embrace those opportunities whilst delivering solutions in a responsible and ethical way. RBC is fortunate to have a long history in this space following the establishment of its research lab, Borealis AI, back in 2016. In partnership with Borealis, we are exploring how we can best leverage AI to deliver unique solutions to our clients. Four years ago, we launched Aiden, an algorithmic trading platform that uses deep reinforcement learning to constantly adapt to changing market conditions in real time. Aiden learns and adapts from every market interaction, continuously striving to improve its performance. We’ve received great feedback from clients using Aiden, and we can benefit from its learnings to drive innovation on our core algo platform. The evolution of generative AI is exciting and the scope to adopt these technologies to drive efficiencies and improve service within financial services is extensive.
How do you expect to see multi-asset solutions evolve in the short and longer term?
In the short-term, we’re going to see continued growth in electronic trading across asset classes. Providers who embrace these areas are likely to see success by leveraging key learnings from various asset classes – whether it’s managing risk, connecting to liquidity providers, or interacting with lit order books. Delivering a connected and consistent strategy and approach to development cross asset class, will be integral for providers to evolve in the near-term. In the longer-term, we expect a bigger focus on digital data and insights. Advanced clients are already building data lakes to help them to make informed decisions about trade opportunities, performance expectations, liquidity profiles and much more. Providers will need to be able to deliver quality insights across asset classes for their clients.
