Dr Robert Barnes, Group Head of Securities Trading & CEO of Turquoise Global Holdings, London Stock Exchange Group, reflects on the values of collaboration.
What skills are required to keep ahead of the pack?
We work in a highly regulated market, and we are looking to solve complex problems that contribute to the real economy.
In the primary markets, we help entrepreneurs to raise capital and investors to convert risk capital into working capital, and these contribute directly to the real economy and real jobs. From a securities trading perspective, we’re relentlessly focused on optimising execution quality, enhancing the efficiency of methods to buy and sell securities, and minimising slippage cost at the time of transaction.
Demographics and automation are driving demand for investment enhanced by geographic diversification. When thinking about compounding returns of investments, if one has 100 to invest, and slippage cost burns 3, just 97 is deployed in the market. If another using a selection of channels can get 99 in the market, that investor already is ahead in compounding the same investment to higher returns.
A single connection to LSEG offers seamless access to the full suite of execution channels of the London Stock Exchange and Turquoise, with oversight from the independent LSEG Surveillance Team.
How do you build the right team?
It starts with a team that understands the landscape and we look for people that have high principles of integrity and innovation that match our culture of inclusion.
We recognise the importance of diversity and want people who are innately curious, who connect with others, listen, learn and constantly question the status quo. There are so many aspects of the value chain – trading, clearing, settlement, data, derivatives, reporting – that it requires perspective and vision of multiple dimensions to draw relevant insights.
What do you foresee as the biggest future challenges?
Our businesses operate in a regulated environment – and we thank the regulators because they provide a framework within which we can behave as entrepreneurs. We innovate understanding the complement of growth and safety. For example, the UK’s Financial Conduct Authority promotes growth through transparency, competition, and investor protection. The Bank of England’s Prudential Regulation Authority promotes competition, safety and soundness.
Innovations in market structure that involve multiple actors along the value chain face challenges of winning mindshare and seeding consensus – which is as much an art as it is a science.
It’s important to collaborate with customers and market participants on new initiatives, because ultimately, it’s a customer centric approach and the network effect that creates success.
What tools and technology will be needed to meet the current challenges?
Technology is becoming ever more sophisticated, and we certainly respect the valuable skills of our technical architects. The reality, however, is that it takes much more than brilliant technology and efficient deployment to evolve market structures.
We also need to maintain an orderly market which requires expert surveillance of giant data sets. We need operations teams to ensure straight through processing, accurate risk management and settlement and custody for on-time delivery and inventory management.
Overall, we need to keep the market open to enable all types of investors to manage risk and maintain member confidence. We need to communicate a coherent vision of how initiatives will be compliant with regulation, how they will structurally work, and how they can be commercially attractive.
What has winning this award meant for you and the firm?
To be recognised by one’s industry peers is the greatest of honours. As much as one person can have an effect, everyone in the team contributed to winning this award. It reflects LSEG’s culture of collaboration that enables our achievement. We are fortunate to be part of a community where all of us are working together for the higher good and the interests of the end investor – to get the best results on a consistent basis – and that is the very definition of Best Execution, thank you.
