60 Seconds with… Paul Squires, Global Head of Trading and Securities Financing, AXA Investment Managers

How did you come to be involved in Plato Partnership and what appealed to you about the organisation?

I was approached by some of the (buy and sell side) founders at a preliminary stage and immediately realised that this was a vision which had potential due to the representatives. I was drawn to the strong theme of collaboration and the desire to create a vehicle which would target applied enhancements rather than just hypothetical debates which were the norm. What struck home was a recognition that to make it sustainable as an endeavour, it should be a utility and that particularly appealed to me. The other theme that was interesting was a shared appetite to innovatively re-design the traditional market dynamics to enhance the end clients’ experience. All of these aspects created a sense of being pioneers in looking at issues from a different perspective. 

What role do you think academia can play in the development of global market structure?

I think academia provides both the empirical insights to drive market enhancements and a reference point for where practitioners feel the theory falls short. More than that I think it adds much needed credibility by being independent and uncompromised – free of commercial objectives which arouses the type of suspicion that we witnessed around the launch of ‘Flash Boys’. Returning to the perception and experience of end clients, we have to remember that this is an industry with significant PR problems and the trust of investors needs to be carefully and robustly restored.

How much change do you expect to your existing approach to best execution, post-MiFID II?

There are some significant operational changes that are required by the directive (the deluge of data fields that need to be reported for example) but I think the key impact will result from the shift of responsibility to the buy side. Historically the buy side only had obligations around best selection-applying due diligence to the decision of which broker to use (with the broker then ‘owning ‘ best execution and being much more influential in managing the order) but the onus is very much now on the buy side trader to evidence their decision making for which strategies to use, what their objectives are and how historic performance will guide future decisions. As the (vastly expanded) post trade data begins to be evaluated, buy side desks will have to be increasingly discriminatory in where their flow goes and this could cause paradigm shifts to the distribution of activity. I think this is why you are seeing so much adoption of algo wheels: a simple operational framework which self- governs best execution requirements.

Will you be using assisted trade reporting?

We don’t intend to and have signed up to using an independent third party vendor solution. I can see why this would be a consideration for some but we felt we would rather not be reliant on brokers (and their decisions around whether to become SIs or not)-particularly in this heightened environment of inducement sensitivity!