Reuters adds Middle East broker to routing network

Thomson Reuters, a market data and trading technology firm, has added broking house EFG-Hermes to its order routing network, expanding its exchange trading offering throughout the Middle East and North Africa (MENA) region.

Market participants who use the Reuters Trading for Exchanges order routing platform, both inside and outside the MENA region, can now send orders to EFG-Hermes for execution. The deal takes the number of regional brokers on the Reuters network to 37 and allows clients to access a variety of markets in the region via EFG-Hermes. These include The Egyptian Exchange, The Saudi Stock Exchange (Tadawul), Kuwait Stock Exchange, Dubai Financial Market, Abu Dhabi Securities Exchange, Nasdaq Dubai and the Muscat Securities Market.

New EU regulatory structure to give CESR more bite

The European Commission has proposed a more centralised European financial regulatory structure to strengthen cross-border supervision and risk controls and prevent future financial crises.

A consultation period ending 15 July will be followed by legislation in the autumn, with a new framework expected to be up and running during 2010.

The proposals, which closely follow the recommendations published by the de Larosière group on financial supervision on 25 February, will create two new pan-European supervisory entities. The 22-strong European Systemic Risk Council (ESRC) will monitor and assess risks to the stability of the financial system as a whole, while the European System of Financial Supervisors (ESFS) will focus on the supervision of individual financial institutions

Credit Suisse poaches UBS’s prime services head in Asia

Investment bank Credit Suisse has hired former UBS executive Matt Pecot to lead its Asia-Pacific prime services business, based in Hong Kong.

In his new role, Pecot will be responsible for spearheading Credit Suisse’s efforts to become a leading prime services provider in the Asia-Pacific region. He will report to Osama Abbasi, head of Asia-Pacific equities, and Philip Vasan, global head of prime services and capital services.

Pecot was head of Asia-Pacific prime services and prime brokerage services at UBS between 2004 and 2007, and subsequently became head of prime brokerage services for the Americas at the bank.

New EU regulatory structure to give CESR more bite

The European Commission has proposed a more centralised European financial regulatory structure to strengthen cross-border supervision and risk controls and prevent future financial crises.

A consultation period ending 15 July will be followed by legislation in the autumn, with a new framework expected to be up and running during 2010.

The proposals, which closely follow the recommendations published by the de Larosière group on financial supervision on 25 February, will create two new pan-European supervisory entities. The 22-strong European Systemic Risk Council (ESRC) will monitor and assess risks to the stability of the financial system as a whole, while the European System of Financial Supervisors (ESFS) will focus on the supervision of individual financial institutions

Credit Suisse poaches UBS’s prime services head in Asia

Investment bank Credit Suisse has hired former UBS executive Matt Pecot to lead its Asia-Pacific prime services business, based in Hong Kong.

In his new role, Pecot will be responsible for spearheading Credit Suisse’s efforts to become a leading prime services provider in the Asia-Pacific region. He will report to Osama Abbasi, head of Asia-Pacific equities, and Philip Vasan, global head of prime services and capital services.

Pecot was head of Asia-Pacific prime services and prime brokerage services at UBS between 2004 and 2007, and subsequently became head of prime brokerage services for the Americas at the bank.

Direct Edge launches Hide Not Slide order

US equities trading platform Direct Edge has introduced a new order type called Hide Not Slide, which allows traders to hide orders that were originally submitted as display-eligible and adjust their price while keeping their place in the order book queue.

Direct Edge said the new order type gives customers an additional choice in fast-moving markets and also respects the needs of the platform’s depth-of-book market data feed subscribers to minimise the dissemination of orders that appear to ‘lock’ the national market – i.e. those where the bid is the same as the ask price.

Bulge-bracket brokers must cooperate to thrive – Celent

Brokers are undergoing a “Darwinian evolution” as a result of demands from their buy-side clients and their own internal challenges stemming from the global financial crisis, according to a new report from Celent, a research and advisory firm.

The report, ‘Capital Markets 2.0: The Future of Institutional Brokerage and Market Making Operations’, found that broker-dealer revenues fell 39% in 2008 compared with 2007, and that bets in the sub-prime and fixed income, currencies and commodities markets accounted for 20% of the overall decline.

At the same time, the buy-side has become more demanding. The report notes that unprecedented levels of volatility have challenged many buy-side models and choice of algorithmic trading tools. As a result, buy-side traders are now requesting more customised, easily integrated and flexible tools to navigate the changing environment.

Credit Suisse launches SOR in Japan

Broker-dealer Credit Suisse has made a version of its Pathfinder smart order router (SOR) available to clients trading in the Japanese market following a period of internal testing.

“We have basically taken the same SOR technology we use in other markets, such as Europe, and adapted it to the Japanese market,” Olivier Thiriet, head of Asian alternative execution at Credit Suisse, told theTRADEnews.com.

While off-exchange executions accounts for a small percentage of overall trading in Japan, there are now several venues trading Tokyo Stock Exchange (TSE)-listed shares. These include the Osaka Stock Exchange, Kabu.com, SBI Japannext, Liquidnet, Instinet’s CBX and JapanCrossing platforms and several broker internal crossing engines. “Without SOR, you cannot possibly leverage the advantages these venues offer,” said Thiriet.

PLUS to trade all AIM stocks after resolving LSE spat

UK exchange group PLUS Markets has resolved its long-standing legal battle with the London Stock Exchange (LSE), allowing PLUS to trade all the stocks listed on the LSE’s AIM small- and mid-cap segment.

The dispute centred on an LSE rule on AIM trading, which required trades in AIM stocks conducted away from the LSE to be reported to the LSE. PLUS argued that this rule effectively prevented the trading of the roughly 1,600 AIM securities on PLUS, save the 90 AIM companies that had elected to be dual-traded on AIM and PLUS. On 19 September last year, PLUS filed an action in the UK High Court challenging the rule.

Under the resolution, PLUS will provide real-time trading data to the LSE to support the exchange’s role in regulating AIM companies and ensuring their compliance with its rules. In turn, market-makers will be able to quote and trade-report in all AIM securities on PLUS’s markets without any additional trade reporting requirements to the LSE.

Uniform ticks sizes would boost competition – BATS

The adoption of uniform tick sizes by trading venues across Europe would help multilateral trading facilities to compete more effectively, according to BATS Europe, a pan-European multilateral trading facility.

The firm argues that uniform tick sizes, along with clearing interoperability and common stock symbology, will ease smart order routers’ search for the best price and liquidity.

“The three frictional structural costs for a smart order router (SOR) are tick sizes, symbology and clearing,” Paul O’Donnell, COO, BATS Europe, told theTRADEnews.com. “An SOR needs to identify the different symbols for each venue, which tick band and the smarter routers try to figure out the impact of clearing costs on overall execution. Standards in these three areas will mean SORs will route depending on who has the best price and most liquidity.”