Are fintech’s latest buzzwords up to the task of solving MiFID II?

By David Beach | 2 November 2017

Quentin Limouzi, Chief Revenue Officer for TS, an electronic trading solution provider, speaks to bobsguide about the current trading market, challenges arising from MiFID II and finding the signal through the noise when it comes to fintech’s buzzwords.


How did you come to TS? 

I joined TS in 2002 as an intern in London when I was fresh out of business school. I moved to Japan shortly afterwards, with the task of building the business in Asia for Asian clients. We had a few outbound Asian traders from the US on the night desk, but we didn’t have clients on the ground. I built the Asian desk, which was successful with a lot of hedge funds and banks who were trading with market access but without technology. That meant that they turned to us to provide a multi-asset and multi-broker system which wasn’t really offered to banks at that time.

In 2007, I moved to the sell-side where I ran execution sales for BNP Paribas so that transitioned into electronic trading and algo trading for the Asian based clients again. It was a very different experience, because you had to adapt to being the machine that traded and received the execution, as opposed to being the middleman. That means that you might have had more market views, but not as much access to the buy side full workflow as you would for a technology company.

What compelled me to come back to TS a little over two years ago was my love of trading. Technology providers like TS spend a large amount of revenue on constantly rebuilding and improving their technology. It was exciting for me to go back into the fintech industry where TS is at the forefront of that technology. 

Where does TS fit within the market? 

The opportunities for TS are plentiful as investment managers are faced with many dynamic and complicated challenges these days. Liquidity is scarce and fragmented in the market post-2008 and volatility has been low. Active management is experiencing a lot of outflows. We think only technology can meet these challenges by providing a better workflow to the investment management process as a whole.

Our solution to this is making things work better together. It starts with all systems being interconnected with access to data - both fundamental, real-time market data - access to IOIs, liquidity venues and analytics. Aggregating data is a big part of what we do. TradeSmart offers a robust repository for data aggregation and the reporting tools to serve compliance, execution management or investment requirements. The other side of our services is access to a highly connected and neutral network, not just in terms of liquidity, but also for execution access. TradeSmart integrates complex algorithms to match the intricacies of the market provided by over 200 sell-side counterparties globally.  It also means a web of connections to third parties or our own OMS, PMS, risk and compliance engines. We simplify all this with a holistic and efficient workflow solution for clients.

One of the other important things we seek to address is ease of implementation.The key aspect here is that we have a cloud based solution, TradeSmart. All asset classes are offered in TradeSmart and its state-of-the-art APIs. Why is this relevant? By pure fact that we are a SaaS makes our onboarding process a true market differentiator,  with the continuous product enhancements and partner integrations seamlessly released to our client base.

There’s one question to ask a SaaS provider and that’s how quickly can you implement.

Absolutely, I’ve been asked so many times: “How fast can you implement?” This market is now pretty mature so clients have been through the hoops and suffered long implementations and they want to ensure it doesn’t happen again. That’s where our SaaS model addresses this completely, it only take a few days to get a client up and running and eventually consolidate, integrate or replace an existing system. When we demo our product to prospective buyers we use the same tool our clients will be given. What you see is what you get on day one.  We then partner with our clients to customize TradeSmart to suit their unique needs. We also have data centres around the world so clients can access that web or network locally therefore providing a latency efficient delivery. TS clients are serviced with round the clock follow the sun support.

The market is seeing a lot of regulatory change, how is TS addressing that?

What others see as a challenge, complying with MiFID II, we see as an opportunity. In the last eight years since MiFID I, we’ve built up expertise particularly for best execution. As MiFID II approaches we’re helping our clients navigate those requirements. We’re delivering a seamless solution around a number of key requirements: reporting, record keeping, risk controls, time synchronisation and best execution.

TradeSmart includes modules that perform advanced risk controls preserving efficiencies in trading workflow, risk monitor windows, ‘what if’ scenarios, operational fat finger risk, positional risk, order violations and an order centre which includes an algo kill switch. For accurate record keeping, TS’s implementation of Precision Time Protocol ensures that all our services across nine global data centres are in sync with UTC with an accuracy of 1 millisecond. These are challenges we anticipated, so these solutions have already been implemented and have been in place for some time.

Which of the big fintech buzzwords do you foresee having serious impact in trading? 

When we move into specific and newly built technologies it’s with the objective to access new strategies.

Specifically for the new technologies and the new buzzwords, we’re offering access to all technology such as AI, data, mining the data, aggregating and matching engines. What we say to the buy side community is we’re not here to replace thought process around trading but to facilitate it. AI is certainly a big buzzword on the streets. We see AI as the clients thought process and models employed by our clients.  We help faciltiate AI through our APIs, aggregation of data and access of best execution venues.  It is on par with our strategy to help our clients with an improved workflow.

Big data is another area we are focused on delivering value for our clients. Our clients want to be able to mine data for their strategies. With nearly 18 years in the business and an ever growing network we aggregate and process a tremendous amount of data. Through Tableau, our state of the art business intelligence tool, reports are now interactive and clients have access to the raw data and the tools to mine it through TradeSmart.

Cryptocurrency is a another buzzword, as any other tradeable product, we are looking to making it available on the platform based on client demand.

How will TS innovate going forward into 2018?

The buzzwords are one thing and we will continue to build and integrate more intelligence tools. Specifcally, we’ve worked on automation tools including our auto routing module that will help traders redefine strategies when orders fall into a set of categories. We’re also working on the algo wheel which helps traders automate best execution. As discussed earlier, we’ve integrated Tableau our business intelligence tool that we offer through TradeSmart, which helps with data mining.

I am proud of my team and their 18 year track record for developing and delivering technology that facilitates the global markets and connects our clients to the best market intelligence for stronger performance and a better workflow.  For 2018 we will continue to deliver on this promise; making our clients workflow as efficient as possible.