3rd CEPR-Imperial-Plato Market Innovator (MI3) Conference 2019 – Plato Discussion Panel



3rd CEPR-Imperial-Plato Market Innovator (MI3) Conference 2019

Plato Discussion Panel

Robert Barnes (Turquoise)
Mike Bellaro (Plato)
Christoph Hock (Union Investment)
Ben Collins (BMLL)
Chaired by Nej D’jelal (Barclays Investment Bank and Plato)


Dr Robert Barnes is the CEO of Turquoise. He has extensive industry experience and market knowledge having formerly been CEO of UBS MTF and a Managing Director, Equities, at UBS. He holds a PhD from Cambridge University and a BA from Harvard, and was formerly Chairman, 2004-2009, of the Securities Trading Committee of the London Investment Banking Association


Mike Bellaro is the CEO of Plato Partnership. He was formerly the Global Head of Trading at Deutsche Asset Management. Bellaro joined Deutsche Asset Management in 1988 and held senior positions across the business including head of equity, derivative and FX trading in Frankfurt. He also oversaw the US equity and derivative trading for Deutsche Asset Management in New York.


Christoph Hock is the Head of Multi-Asset Trading at Union Investment and Buy-Side Chairman at Plato Partnership. He joined Union in April 2014 and, with his team, is responsible for all trading activities associated with portfolio management of cash equities, fixed income, fund and ETF business, FX, listed and OTC derivatives, and securities lending.


Ben Collins is Head of Sales & CRM at BMLL. He has over 17 years’ sales management experience working with major enterprises supporting their market data, analytics and execution needs. Prior to joining BMLL, he was Managing Director – Europe for ACTIV Financial, where he ran ACTIV’s sales and business development activities in EMEA.


Nej D’jelal is Managing Director of EMEA Electronic Equities Product at Barclays and Sell-Side Chairman at Plato Partnership. Nej joined Barclays in August 2012 from Goldman Sachs where he served as Executive Director. During his 6 years at Goldman his role included product development and algorithmic trading. He started his career in 2002 as an Analyst / Programmer at IT consultancy Logica.


Main Takeaways and Quotes


D’jelal opened the panel by discussing the importance of the MI3 Conference: a combination of representatives from the buy-side, sell-side, exchanges, regulators and academics. It is very important for all market participants to work as a community in order to answer the pressing questions facing the market more broadly. Accordingly, the first question asked was:


“What does community mean and how has Plato evolved to the point that we’re at today”


Hock: Buy-Side used to have very little impact; very little say. Nevertheless, it’s really key for us to deliver the best possible service for our clients and our investors”. The fragmentation of the landscape seen under MiFID I led to the necessity for the buy-side to be more vocal, with a greater balance in voice between buy-side, sell-side and platform providers.

“Collaborations like Plato are really key for us to express our views and our concerns in order to create the very best environment for our clients to act in. It’s about optimising cost of trading and best access to liquidity, and Plato is a great collaboration” facilitating conversation with regulators and providers around equities trading.


Barnes: “the biggest challenge we face is when we develop something that has a very high fixed cost base, how do we, as a community, come together to immediately provide that network effect to increase the probability of success?”


According to Barnes, only 7% of these products are successful; 90% fail and raising this probability of success is reliant on participants coming together.


Bellaro: When discussing the formation of Plato, Bellaro explains that “you can sit on the side-lines and complain […] or you can get together with likeminded firms and try to take a stand for the greater good, and that’s really where Plato’s come from.”


He explains that the revenues from Plato are used to fund new initiatives, including the academic partnership with Imperial and access to data, as is seen in the new partnership with BMLL.


D’jelal summarised the first question: “We wanted to bring together the academic and practitioner community because we know that academics need real business problems and data, and practitioners need to be able to work with talented and dedicated researchers in order to again inform future of market structure.”


“How do we reduce the barriers to entry; to stitch together the end to end workflow? Because that’s the challenge?”


Hock: In response, Hock explores the unintended consequences of MiFID II – “complexity delivers advantages when it comes to execution”. With the greater complexity introduced by MiFID, we see greater opportunity to choose the best venue; competition reduces fees.


Bellaro expands, explaining that we are “coming out of a period of regulatory fatigue” following three years of MiFID II and Brexit. Businesses have been ‘running’ as opposed to ‘changing’ in trading. However, Bellaro believes that we are “about to see the next wave of innovation in technology”, as we move away from that regulatory and political barrier, and with millennials rising through the ranks at different investment bodies with a greater drive towards technology.


The rise of AI and machine learning elements will usher in the next wave of workflow, changing the trading landscape and offering new opportunities and challenges for all market participants.


Collins is asked to expand on this technological drive in the world of trading, from his perspective from BMLL


“MiFID II was created with the intention of bringing power to the end investor”


Contrary to expectation, and as a result of the focus on best execution, the customer base of BMLL has expanded from just buy-side to more classic asset managers and investment managers. Saved execution costs are now viewed as Alpha for clients.


Highly granular data, for BMLL, has accordingly seen a vastly expanding demand, with a far more diverse set of use cases, from buy-side honing their algorithms and aggregating granular data, through to HFTs (high frequency traders) who currently don’t have platforms capable of harnessing the power of their own data, who use BMLLs platform to build features that they can build into their models. “It’s a very broad pickup.”


Barnes reiterates the point that “saving cost contributes to Alpha” for the end investor, but that there is a challenge posed for anyone dealing in data – “we have a hypersensitivity around confidentiality of data”. Plato has provided a framework with scientific rigour and the necessary tools to engage with data while providing the confidentiality necessary.


D’jelal takes this question of data forward, highlighting that “One of the historical impediments to allowing us build a more holistic approach to capturing and normalising data has been client confidentiality. It’s extremely important and sensitive and needs to be treated accordingly.”


There has been an increased appetite to host and process data in the cloud space – D’jalal takes this question forward, asking if there is “more appetite being translated into practical uses for cloud and third party providers of data, or is it still early days for the buy-side?”


Barnes summarises that “we heavily rely on external talent” as the in-house resources cannot be extensive enough, and often the security is ‘too conservative’ to facilitate the rapid turnaround of data required to keep up with a rapidly changing market space.


For Barnes, “Data is the new gold”.


“What is the opportunity to get involved with Plato?”


Mike summarises that it is necessary to bring together policymakers and regulators together with market participants to enable to kinds of discussions that can move the market forward. The academic research and data elements are at the core of this discussion, providing the data that shapes these discussions constructively.


“You can really help shape the future of equity trading […] Plato is willing to fund the cost of data – if you are looking for access to data we do have a partnership club with corroboration with BMLL; we’re willing to pay for that; we think it’s a worthwhile exercise to give back to the broader community.



Images: Muhammad Ashraf ©2019