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Brokers Face Cost-Cutting Limits
Markets Media | Dec 20
Agency brokers are increasingly under scrutiny from their institutional buy-side counterparts to provide more and more transparency. Also, the buy side wants to know about costs and how the brokers can either explain their charges and/or reduce them. Historically, this has focused on order handling and dark pools chosen but now, Weeden & Co. has shed light on its costs incurred during the normal of business. Andrew Upward, head of market structure at Weeden & Co., wrote in a client note that its larger institutional clients recently asked it to make a full accounting of its execution costs so that they could better understand the true potency of their commission dollars. After reviewing its costs and seeing how the information was appreciated by its clients, the firm noted that brokers’ costs (including its own) are increasingly concentrated in areas where it has little control or flexibility.
Deutsche Bank Ramps Up Its Asia-Pacific Equity-Derivatives Unit
Bloomberg | Dec 20
Deutsche Bank AG is beefing up its Asia-Pacific equity-derivatives unit, as it looks to capitalize on an expected rise in demand for quantitative strategies from local investors. David Bruchet, formerly of Societe Generale SA, will join the German bank in Hong Kong as an index equity-derivatives trader at the end of January, said James Boyle, head of equities and co-head of global equity derivatives, who joined from Citigroup Inc. in July. Bruchet becomes at least the sixth hire in the region under Boyle, who is putting in place his strategy to turn around Deutsche Bank’s fortunes in equity-derivatives trading.
World’s Largest Trading Floor Put on the Block
Wall Street Journal | Dec 20
For sale cheap: the world’s largest trading floor. Soaring 40 feet high, the UBS trading floor was bigger than a football field, unimpeded by columns and soon filled with hundreds of stock, bond and currency traders. Now the office complex and its once-iconic trading floor are both mostly empty and up for grabs. CW Capital Asset Management, the servicer that controls the $149.4 million mortgage on the 712,000-square-foot complex near the Stamford train station, has hired Mission Capital Advisors to put the debt on the block, according to people familiar with the matter.
The Blind Men and the Elephant
Markit.com | Dec 20
The quest to evaluate trading quality is remarkably similar; combining several key perspectives of the process is the only true way to gain an accurate picture, particularly for institutional investors. From the time a portfolio manager makes a decision to purchase or sell stock, many steps take place. Their order traverses their trading desk, a routing broker dealer and, quite often, multiple market centers consisting of exchanges, alternative trading systems and market makers. It is important to measure the performance of each of these participants in the proper context in order to gain an accurate understanding of the full process.