What were the key drivers behind BMO’s ‘Best Access to Market’ win?
Ahead of our launch in Europe last year we built access to over 80 venue services in EMEA in 18 months. We were able to accelerate the development and launch of our EMEA offering by acquiring the Clearpool Algorithmic Management System (AMS), BMO’s electronic trading technology. We are live in two data centres with a further four data centres under way. Our deep understanding and partnerships with trading venues including exchanges, MTFs, and systematic internalisers allow us to configure routing protocols that utilise the unique liquidity profiles for individual venues. We believe that our innovative technology is a key driver of our business model as it allows us to deliver and help our clients achieve their performance objectives. Our technology combined with our experienced team of execution consultants help our clients achieve better quality executions while navigating the complex landscape of European and North American equity markets.
What were the most important aspects of BMO’s offering which led to its ‘Best Customer Support & Consulting’ win?
BMO Capital Markets has had a presence in Europe for several decades. We have an experienced local team of sales traders covering North American and European equities with very strong relationships. A key to our success has been expanding our electronic offering to those existing relationships, alongside building new ones, and offering clients both high-touch or low-touch coverage in Europe.
Our approach to electronic trading is to work closely with our clients and bring together our market microstructure insight and data driven execution consultancy approach to help drive trading performance. This can take the form of setting up customised algo configurations, routing protocols and A|B trials to continually improve upon trading results.
What is the most important aspect for market participants when it comes to supporting their clients?
The feedback we get from clients is that service and execution performance matters the most. Institutions have come to expect a level of service from their broker-dealers that is collaborative, data driven, and ultimately drives performance. We offer our clients comprehensive venue access across Europe and North America, along with a global team of execution consultants to support their algorithmic trading goals.
What trends do you see having the most impact on algorithmic trading in 2024?
Based on our Greenwich survey earlier this year on the “Globalisation of Algorithmic Equity Trading”, margin pressure, budget constraints and regulatory changes are all factors that continue to drive the adoption of electronic trading. Regulatory changes such as the SEC proposals in the US or the Mifid review in Europe, coupled with the move to T+1 in North America next year, could lead to significant changes in trading behaviour and market microstructure.
What do you expect the biggest drivers of growth for BMO to be going forward?
We expect to grow by continuing to build on our large North American franchise and to expand our footprint in the European markets. In times of volatility, we tend to see increased levels of intraday trading, partly driven by activity from market makers and hedge funds. We have also observed that activity tends to migrate away from dark books towards lit exchanges. To maximise performance and minimise impact, trading opportunistically can prove to be effective. The AMS has opportunistic triggers to strengthen our ability to source liquidity, both actively and passively, where we have edge. In addition, our custom trader algo set-up leverages market information in real-time and adjusts algo behaviour accordingly.
What makes for longevity in the algo trading provider landscape?
The feedback we get from clients around their algo usage remains critical to staying relevant and important. According to industry surveys, algo coverage and liquidity, ease of use, reliability and quality of service and support are the most important selection criteria for low-touch market access. We believe that our differentiated value proposition, coupled with deep client relationships, make our electronic trading service valuable in today’s competitive markets. Since our launch, we are grateful and encouraged by the support we received from our clients and partners. Next year, we are excited to continue to provide differentiated electronic trading solutions in Europe and North America.
