Eyeing the regulatory changes in European equity markets with MiFID, Rosenblatt Securities hired Tom Sanders, formerly of Bank of America International, as a managing director to build an international trading desk for the New York-based institutional agency only broker.Sanders, a veteran of international trading, joined Rosenblatt three days ago. His previous experience includes BofA where he was a managing director running the New York-based international desk for BofA for four years. Previously, Sanders also traded European equities for NatWest Securities and European, Latin American and South African equities for UBS for more than a decade combined.
"Clearly international trading has been growing at a faster pace than the U.S. so we always had our eye on it," says Joe Gawronski, president and COO at Rosenblatt Securities. Though Rosenblatt launched a European subsidiary, RSI Europe, in Dublin in 2002, it has been marketing U.S. execution services to European institutions from there , but not trading in local markets.
Now with regulatory changes like MiFID happening in Europe and other changes unfolding in Asia and Canada, Rosenblatt sees parallels to 1997 order handling rules and Reg NMS in the United States, which led to market fragmentation and the rise of ECNs and alternative trading systems. "The changing regulatory environment, unbundling - all of this favors execution-only alternatives," says Gawronski with respect to Europe. Given Rosenblatt's focus on navigating U.S. market structure, the agency broker is positioning the firm to take advantage of a more fragmented market that is expected to result from new alternative trading systems such as Instinet's Chi-x, Equiduct and Project Turquoise that will be competing with the traditional exchanges.
But the timing of the move has more to do with meeting Sanders, and getting to know him and his experience and finding that he was the right person to build an international trading desk, he says.
Sanders will work out of Rosenblatt's New York office during the European trading hours, starting from 2:00 a.m. EST and finishing up at noon. Initially, the firm will focus on European, Canadian and some Latin American markets, and then Asia will happen next. Sanders' first task is to set up an international trading desk and to see where the opportunities lie. "Right now we're searching for the technology that will be MiFID ready," says Sanders, adding, he needs to get the systems up and running first before he goes down the path of hiring more people.
While Sander's hours will initially be European trading hours, at some point, Gawronski doesn't rule out hiring someone to trade Asian hours, "but you really don't do it until the business justifies it," he says. Since the firm's customers do a lot of international trading, we can try to grow organically before we hire a big team," says Gawronski.
Currently, in U.S. stocks, Rosenblatt uses Lava Trading for single stock trading and RediPLUS for program trading. As far as shopping for a system that handles international stocks, Gawronski says, "It's got to be competitive pricing. It's got to be MiFID ready, and have smart order routing and algorithms. "The key functionality elements are it has to have access the markets we want to trade, it has to be compliant with those markets and then ease of integration with our OMS trading and back-office system has to be a consideration," says Gawronski.
Sanders says with MiFID, just like Big Bang in London on Oct. 27, 1986- which abolished fixed commissions and did away with the floor of the London Stock Exchange in one day- there are changes ahead. "Exchange fee commissions are going to fall faster than you think and there's going to be more competition and more groups like Chi-x are going to pop up. So the technology on the international side is going to be almost always a work in progress," he says.Eyeing the regulatory changes in European equity markets with MiFID, Rosenblatt Securities hired Tom Sanders, formerly of Bank of America International, to build an international trading desk for the New York-based institutional agency only broker. Ivy is Editor-at-Large for Advanced Trading and Wall Street & Technology. Ivy is responsible for writing in-depth feature articles, daily blogs and news articles with a focus on automated trading in the capital markets. As an industry expert, Ivy has reported on a myriad ... View Full Bio