Plato Partnership Newsletter October 2020

Turquoise Plato Trade At Last™

Ahead of the launch of Turquoise Plato Trade at Last™ on October 19th, Scott Bradley, Head of Sales and Business Development, London Stock Exchange Secondary Markets and Turquoise, sets out the opportunities it presents for investors.

“We are excited about the launch of Turquoise Plato Trade At Last™ on October 19th, our latest innovation in partnership with Plato. This is the first time that investors have the opportunity to seek further liquidity following the closing auction of the relevant Primary Market via a dark undisclosed execution channel.   Once the underlying Primary Market has completed its natural price formation process and made public the official closing price, both firm and conditional orders can be submitted into Turquoise Plato Trade At Last™ (until 16:45 UK time across all 17 EU markets covered by Turquoise Plato®).

Using the same Turquoise Plato® and Turquoise Plato Block Discovery™ functionality that currently provides award winning mid-point dark block liquidity during continuous trading, the Turquoise Plato Trade At Last™ will simply reference the close price instead.   Access to the service is automatically provided through existing connections to Turquoise Plato® and the mic code (TRQM) remains the same, thereby requiring little or no additional operational lift to onboard.   ​

Turquoise Plato Trade At Last™ provides a post-close liquidity opportunity without information leakage due to the nature of remaining a fully dark and undisclosed service which complements existing end of day processes.   This is a new and different offering to those which exist currently on European lit venues, including Primary Market trade at last (TAL) functionality. Turquoise Plato Trade At Last™ can be considered an extension to the Turquoise Plato® service.”

Read the full article 

2020 Plato Market Innovator (MI3) Conference
The 2020 Plato MI3 conference took place as a two day online event on 23rd and 24th September. Respected academics from universities across the world presented a number of papers on the most current trends and topics affecting market participants in Europe.

Plato believes that it is important to take a truly collaborative approach to enhance the reputation of equity markets, and improve the experience of market participants. The input of academia is crucial in helping policymakers make more informed decisions, and this is at the heart of MI3.

At the end of the conference, Samarpan Nawn was announced as the winner of the Best Paper Award for Order Exposure in High Frequency Markets. The paper was co-authored by Bidisha Chakrabarty, Terrence Hendershott, and Roberto Pascual. Thomas Ernst won the Best Paper by a Young Researcher award for Stock-Specific Price Discovery From ETFs. Congratulations to all.

If you missed any of the sessions, videos from the conference are available on the Plato website now, along with copies of each of the papers here or at the links below.

Trading Fees and Intermarket Competition

Informed Traders and Dealers in the FX Forward Market

Stock-Specific Price Discovery from ETFs

Order Exposure in High Frequency Markets

Strategic Trading as Response to Short Sellers

The Rise of ETF Trading and the Bifurcation of Liquidity

Cross-Venue Liquidity Provision: High Frequency Trading and Ghost Liquidity

Plato Partnership Newsletter September 2020

PLIA by PLATO Publishes a New European Questionnaire for Best Execution and MiFID II Compliance

After almost three years, a new European focused questionnaire has been created to modernize the existing due diligence framework so investment managers can ensure best execution standards are being realised.  The new questionnaire expands upon the 2017 version with more emphasis on risk controls, surveillance, systematic internalisers, and venue selection.  While the questionnaire is focused on electronic trading protocols and capabilities for equities, the 124 questions cover a lot of ground as it relates to broader issues, such as analytics, team structure, reporting, and client confidentiality.

Bill Stephenson, CEO of Urvin.Compliance, said, “After becoming a preferred partner of the Plato Partnership earlier this year, we formed the European Advisory Board (EAB), which includes 10 major buyside (representing £10 trillion in AUM) and several of the largest global sellside firms.  The EAB has been instrumental in creating the latest version of this questionnaire which will become the new standard for European investors.”

Users of the PLIA by PLATO platform in Europe can now access this questionnaire, including the ability to customize the template by deleting or adding existing questions from an extensive global database.  The benefits for the sellside are clear; once a question from the new questionnaire is answered for one client, it will automatically populate for all clients asking the same question.  The sellside user would just need to verify the automated response before submitting it to each client.

With higher standards related to best execution under the MiFID II regime, the meaning of ‘taking all sufficient steps’ to achieve the best results for clients means fully understanding how counterparties operate and ensuring that it aligns with an asset manager’s execution objectives.  Part of that validation process can be achieved by leveraging Plia’s capabilities whereby the counterparty responses can be centrally managed, audited, compared, and better understood. This industry-led standardisation process creates a common framework where best practices can become more obvious and transparent.

“Having a standard questionnaire for European asset managers will not only streamline their process for counterparty management, but the collaborative energy used to organise this questionnaire will ensure many of the right questions and conversations are occurring throughout the industry,” noted Stephenson.

In the future, Plia will be publishing an updated version on a yearly basis, in addition to regional versions that align with local regulatory regimes and market structure nuances.  Additional multi-asset versions will also be compiled to meet other standards, such as the recent FICC Markets Standards Board draft as it relates to algorithmic trading in the fixed income, currency, and commodity markets.

Free access to the new questionnaire can be requested here.

Turquoise Plato Lit Auctions™

Further to the update provided during the Summer, our focus remains Turquoise Plato™ and Turquoise Plato Lit Auctions™ and particularly now the GFA order type is active. This should make the Turquoise Plato Lit Auctions™ a priority for inclusion in broker lit algorithmic strategies.

Whilst we know historically firms have included Turquoise Plato Lit Auctions™ just within dark algo suite strategies on the basis it is another way to trade smaller sizes at midpoint when stocks have been prevented from dark trading due to Double Volume Caps. The introduction of the GFA broadens this opportunity across into lit strategies.

Fewer firms, we understand, have added Turquoise Plato Lit Auctions™ to lit order book strategies. They should, since VWAP strategies for example with patient orders resting on the bid or offer that, when unfilled are often forced to cross the spread to trade. Such orders should try to achieve price improvement at the midpoint via Turquoise Plato Lit Auctions™ rather than suffer the full spread when that time for urgency arrives.  Firms should continue to consider strategies which rest meaningful positions in Turquoise Plato Lit Auctions™ to ‘catch’ these GFA orders that will check Turquoise Plato Lit Auctions™ before crossing the spread. We continue to see in addition to trades at midpoint, significant and unique liquidity in Turquoise Plato Lit Auctions™ with large size orders.

Matching large orders
Routinely more than a fifth of Turquoise Plato Lit Auctions™ trades are above €100k which can be 10x or more the average trade sizes of stocks matched on continuous UK & European order books, both dark and lit…and at midpoint saving costs.

At the larger end of the scale, the Max trade sizes recorded are much more than 100x larger than average trade sizes. Turquoise Plato Lit Auctions™ offer unique liquidity mostly at midpoint with quality low price reversion after the trade.

Internal analysis indicates that the most recent hardware refresh of Turquoise last year has had a further positive measure with the system latency of Turquoise today being significantly lower (= better) than that of many Primary markets.   Therefore firms should be prioritising Turquoise more for UK & European names.  We are happy to discuss bilaterally with members to explore how we can help serve as a sounding board to optimise order execution. The key message is that it makes sense to prioritise Turquoise: for conditionals like Turquoise Plato Block Discovery™ – you get the firm up faster, and for frequent batch auctions like Turquoise Plato Lit Auctions™ – now with GFA order type which functions like an IOC into frequent batch auctions for lit midpoint trading.   All of these channels are there to help get business done from a quality of execution perspective.   Remember, Turquoise randomised matching mechanisms remain industry leading from a low price reversion after the trade measure.

2020 MI3 Conference and Plato Conversations Online Events

You will have hopefully already received invites to our two upcoming online events, the 2020 MI3 conference on 23 – 24 September and the Plato Conversations on 10 November.

The 2020 MI3 Conference will see respected academics from Universities across the world present a number of papers on the most current trends and topics affecting market participants in Europe, while the Plato Conversations event will focus on the future of artificial intelligence and feature leading experts on AI and financial services.

Response to the events has been strong, so if you have not already registered your interest please do so using the link below.

Find out more and register for the 2020 MI3 Conference Here

Find out more and register for the 2020 Plato Conversations Here

2020 Plato Conversations

Online Event, Tuesday 10th November 2020, 14:00 – 17:15 GMT

Register Your Interest

Plato Partnership is excited to announce the inaugural Plato Conversations, an online event focusing on the future of Artificial Intelligence. Plato Conversations will be hosting four keynote speakers:

  • Rochak Lamba, Industry Architect for Capital Markets, Google whose work on trading products at banks and exchanges along with latest technologies provides him with unique insight. He will be speaking on the topic of “Next generation analytics for trading augmented by ML”;
  • Daniel Hulme, CEO, Satalia is a leading expert in Artificial Intelligence and emerging technologies. Satalia is an award-winning company that provides AI products and solutions for global businesses. His speech will be on the topic of “AI and the Future of Business”;
  • Calum Chace, Author,  is a respected commentator on Artificial Intelligence and its likely future impact on the individuals and the economy. He will be discussing “How we can capture the amazing opportunities of our exponential future with AI, in financial services and beyond.”;
  • Dr. Darko Matovski, CEO, co-founded causaLens with the mission to develop machines that truly understand cause and effect, and ultimately optimise the global economy. He will be speaking on the topic of “Why Causal AI is the only path to true AI and how it is helping businesses in finance and beyond”.

Each speaker will be presenting for approximately 30 minutes followed by a Q&A. The event will be moderated by Professor Fethi Rabhi  from the School of Computer Science and Engineering, The University of New South Wales.

Register your interest using the link below to save your place!

Register Your Interest

For more information on timings and how the online venue will function, please contact plato@cicero-group.com 

Plato Partnership Newsletter June 2020

Turquoise Plato Trade at Last

At last an opportunity to capture that all important close price utilising the Turquoise Plato™ dark trading service you already value and use today…

Plato Partnership are excited to announce that Turquoise Plato Trade at Last™, our new collaborative product with Turquoise, is set to go live this summer. Turquoise Plato Trade at Last™ will allow market participants to proactively search for liquidity within Turquoise Plato™.

Mike Bellaro, CEO, Plato Partnership:
“We are delighted to announce the launch of Turquoise Plato Trade at Last™. Our ongoing collaboration with Turquoise is the most important relationship for Plato Partnership. Now more than ever, and in spite of the strain placed on all of us during the COVID-19 pandemic, Turquoise and Plato share a commitment to bringing new innovations to the table as we continue to work towards a more efficient, innovative marketplace for all its participants.”

Scott Bradley, Head of Sales and Business Development, Turquoise and London Stock Exchange, LSEG:
“We are excited about Turquoise Plato Trade At Last™, our latest innovation in partnership with Plato. This is the first time that investors have the opportunity to seek further liquidity following the closing auction of the relevant Primary Market via a dark undisclosed execution channel. Once the underlying Primary Market has completed its natural price formation process and made public the official closing price, both firm and conditional orders can be submitted into Turquoise Plato Trade At Last™ (until 16:45 UK time). Using the same Turquoise Plato™ and Turquoise Plato Block Discovery™ functionality that currently provides award winning mid-point dark block liquidity during continuous trading, the Turquoise Plato Trade At Last™ will simply reference the close price instead.

Access to the service is automatically provided through existing connections to Turquoise Plato™ and the MIC code (TRQM) remains the same, thereby requiring little or no additional operational lift to onboard. Turquoise Plato Trade At Last™ provides a post-close liquidity opportunity without information leakage due to the nature of remaining a dark undisclosed service and complements end of day processes with a 16:45 (UK Time) finish time.

This is a new and different offering to those which exist currently on lit venues offering Trade At Last functionality and can be considered an extension of the Turquoise Plato™ service. This can be especially useful if monitoring quality block executions coming back from Turquoise via Tag30 and Tag851 towards the end of the trading day…Turquoise Plato Trade At Last™ provides a unique service to capture additional opportunity, same day as soon as the closing price is known.”

 

GFA order type – enhancing the Turquoise Plato Lit Auctions™ opportunity

Adam Sherlock, Business Development Manager, Turquoise and London Stock Exchange, LSEG comments on the pending go-live of additional value-add functionality which is also due to be released this summer:

“Turquoise is re-introducing the Good For Auction (GFA) order-type into Turquoise Plato Lit Auctions™ but this time with significant added workflow benefit. The GFA order will bring frequent batch auctions into more agile, opportunistic and liquidity seeking routing logic, whilst preserving the demonstratable execution quality associated with Turquoise Plato Lit Auctions™ (TRQA MIC). When sent to Turquoise Plato Lit Auctions™, a GFA order will either trigger a new auction event or join a live ongoing auction if it meets with suitable contra-liquidity, if no suitable contra-liquidity is met it will be cancelled immediately back to the sender. Turquoise members, therefore, can use this new GFA order proactively to search for liquidity within Turquoise Plato Lit Auctions™ with absolute minimal latency, and subsequently an improved risk return profile when seeking unique liquidity across the European market landscape. The use of price limits when sending GFA orders further enhances the TRQA proposition as a highly efficient destination in the search for liquidity both at and away from midpoint. All that is required to access this functionality is a simple change in the Time In Force (TIF) from DAY to GFA.”

 

Turquoise chief says industry profile has changed as block trading soars

Dr Robert Barnes, CEO  Turquoise, has told The TRADE there has been an underlying change in how business is getting done.

The volatility sparked by the global coronavirus pandemic has led to a shift in how traders are interacting with larger-sized trades, and the profile of the Turquoise Plato dark pool has evolved over time from mainly small sized trades several years ago in 2016, to the majority of activity being large-sized electronic blocks in the first quarter this year.

Read the full article here.

Plato Partnership Newsletter April 2020

Turquoise

The Turquoise Plato partnership is our oldest and most valued partnership. Together, we created the Turquoise Plato Block Discovery™ and Turquoise Plato Lit Auctions™ as cornerstones of our mission to enhance and improve the market for all its participants.

In times of economic stress, the mettle of financial services is tested. During the stress caused by COVID-19, Turquoise has proven itself once again in providing strategic liquidity, alpha preservation and a safe, secure, trusted environment in which to trade. The record volumes traded on the Turquoise Plato platform are commensurate with its importance as a vital mechanism for liquidity and the flow of capital, even during a difficult trading environment.

Turquoise Plato has seen record volumes in the first quarter of 2020, and both partnership products have continued to grow and excel. In March, Turquoise Plato Block Discovery™ latest record month by value traded saw €19.33bn traded, (33 percent higher than the previous monthly record in February 2020).  In addition, Turquoise Plato Block Discovery™ saw a record quarter of  €46.1 billion value traded in Q1 87 per cent higher than the previous record quarter of Q1 2019.

Turquoise Plato Lit Auctions™ also had a record month by value traded in March. With over €2bn traded, this was 51 percent higher than the previous monthly record in February 2020. For us, the Turquoise Plato partnership is the benchmark for success we continue to hold ourselves to.

Turquoise Plato Quarterly Records

Turquoise Plato Lit Auctions™

  • Q1 2020 is new quarterly record € 4.29 billion (+51% more vs prior record € 3.42 billion Q3 2018)

Turquoise Plato Block Discovery™

  • Turquoise Plato Block Discovery™ Record Quarterly value traded of € 46.1 billion in Q1 2020 (+87% higher than prior record Q1 2019 € 24.7 billion)

View the full latest Turquoise Plato venue data here.

Plato Partnership Events

COVID-19 has dramatically changed the way we all do business. We’d like to take this opportunity to say we hope that all our Plato members and their loved ones are well and remain virus-free. A lot of companies have taken the sensible precaution of rearranging conference and events to prevent the spread of COVID-19. Unfortunately, this is having an impact on the Plato Calendar of events. Several of our events, and those of our partners, are sensibly being delayed to prevent the avoidable spread of the disease. We will be sure to provide updates as we look to rearrange the dates for events or at the possibility of holding them digitally.

  • AIR Summit London 2.0 has been cancelled for 2020
  • The MI3 Conference has been rescheduled to 24 September 2020 pending uncertainties throughout the remainder of the year
  • Plato Summit is still currently scheduled for 10 November 2020 pending uncertainties through the remainder of the year
PLIA by PlatoWe are pleased to announce a new Plato Partnership initiative in partnership with Urvin.Compliance. PLIA by Plato is set to become the most advanced platform available and the industry standard for securities trading governance, in Europe. With features guided by Plato Partnership members from both the Buy Side and Sell Side, the platform will allow traders and compliance professionals to systematically communicate and document trading practices.

Access to PLIA by PLATO is available to all institutional investors and their broker-dealer partners. Typical users include traders and compliance personnel who are engaged in the best execution review process.

Bill Stephenson, CEO of Urvin.Compliance said: “The mission of Urvin.Compliance is to promote transparency and accountability within the best execution process, and the PLIA by PLATO platform will set a new standard for the exchange of important information between counterparties.  We are excited to become a preferred provider of the Plato Partnership and look forward to collaboratively creating efficiencies, innovative solutions, and game-changing functionality for its membership and all other users of the platform.”

Babelfish

Last year, we announced that Plato will be introducing BabelFish Analytics’ ClarityReveal, a next-generation trade cost analysis platform, to the European market in 2020 as Plato-Clarity.

The Plato-Clarity consulting platform is a fully functioning analytical solution. Subscribers alert brokers that they are participating and Babelfish will take care of the rest. The processed data is delivered in a series of highly customisable ‘tableau’ dashboards that illuminate aggregated venue and sequencing activity, internalisation, transaction fees and rebates, momentum and signalling, comparative broker scorecards, and proprietary metrics that enable traders to understand the trade-off between liquidity sourcing and information leakage control.

For more information on Plato-Clarity, you can read this article by Jeff Alexander, Founding Partner, and Linda Giordano, Founder and CEO of Babelfish in Best Execution.

Plato Partnership and Urvin.Compliance launch PLIA by PLATO

  • PLIA by Plato will provide market participants with a centralised repository for all best execution-related due diligence questionnaires and data requests;
  • A fully transparent and auditable record of communication between counterparties; and
  • A customisable response grading and reporting process.

Plato Partnership, the not-for-profit company working to improve the European equities marketplace, and Urvin.Compliance, a compliance and analytics provider, today announced the launch of PLIA by PLATO.

PLIA by PLATO is the most advanced platform available, set to become industry standard for compliance and best execution-related due diligence, in Europe. With features guided by Plato Partnership members from both the Buy Side and Sell Side, the platform allows traders and compliance professionals to systematically communicate and document trading practices.

The scope of PLIA by PLATO is extensive, from helping firms improve their best execution process to providing the ability to measure and compare their counterparties across an array of metrics. Its launch marks another milestone in Plato’s mission to bring much-needed innovation to the European marketplace and all its participants.

Mike Bellaro, CEO of Plato Partnership, said: “Since its inception, Plato has been committed to improving the structure of the European marketplace and to providing a forum for better communication between the buy and sell-side. PLIA by PLATO brings us another step closer to realising these ambitions, bringing greater efficiency into the best execution process across a range of assets.”

“This partnership marks an unprecedented step forward in enabling better communication between the Buy and Sell-side. PLIA by PLATO’s features have been guided through collaboration with our market-wide membership, and the platform will continue to adapt with the changing demands of the marketplace.”

Adam Conn, Head of Trading at Baillie Gifford said: “Having this central and secure platform will solve some of the challenges faced by trading and compliance teams, helping them to manage risk and due diligence when executing trades.

Bill Stephenson, CEO of Urvin.Compliance said: “The mission of Urvin.Compliance is to promote transparency and accountability within the best execution process, and the PLIA by PLATO platform will set a new standard for the exchange of important information between counterparties.  We are excited to become a preferred provider of the Plato Partnership and look forward to collaboratively creating efficiencies, innovative solutions, and game-changing functionality for its membership and all other users of the platform.”

Access to PLIA by PLATO is available to all institutional investors and their broker-dealer partners. Typical users include traders and compliance personnel who are engaged in the best execution review process.

About PLIA by PLATO

PLIA by PLATO is a highly secure platform that allows counterparties to share important information about trading practices. This centralised process will streamline the communication of new procedures and best practices to ensure counterparties remain in sync with internal objectives and regulatory obligations.

PLIA by PLATO can support global markets and multiple asset classes. Asset managers can leverage existing standardised questionnaires or create their own from a large selection of questions in the PLIA database. With over 400 counterparties having utilised the PLIA platform in the past six years, PLIA by PLATO has a significant network spanning almost all markets.

For more information about PLIA by PLATO please visit: https://www.plia.co.uk/plia-by-plato

Plato Partnership Newsletter February 2020

Tradeweb

Tradeweb’s European cash equites RFQ “eblock”, developed in partnership with Plato, recently marked its one year anniversary and what a year it has been. Tradeweb has demonstrated that the RFQ has very low toxicity and that it is a stable pricing protocol. One year on, Tradeweb are now supporting both above and below LIS whilst liquidity provision has grown significantly, the average trade size has increased, quoted spreads have improved and the speed of response continues to get faster.

Clients can also create bespoke rules using the AiEX tool (Automated Intelligent Execution) to trade directly from their EOMS. The tool will allow clients to conduct an initial sweep of the market to see if a contra IOI is available and only when it is, will an RFQ be activated.

The cash equity RFQ protocol has established itself as a key tool in the search for principal liquidity, and we are excited about the new developments and to see it evolving over the next year.

 

New Members Join Plato Partnership

We are delighted to announce that that T. Rowe Price, Allianz Global Investors, Schroders, Credit Suisse International and Exane BNP Paribas are now members of the Partnership. As five of the leading players in the modern equities marketplace, this news punctuates the end of a milestone year for Plato Partnership.

In 2019 alone, Plato have forged two new partnerships with best-in-class data providers BMLL Technologies and Babelfish Analytics, and brought AIR Summit to London, an entirely unique annual conference, connecting the European buyside with cutting-edge players in Alphatech from across the globe.

None of this would have been possible without our members and sponsors, we would like to use this opportunity to thank you for your continued support. Together we know that the Plato Partnership is set to grow from strength-to-strength.

Platometrics

Platometrics, in partnership with BMLL Technologies, has been a resounding success. With the launch of the platform in early December, Platometrics is the first service of its kind, providing market participants with a complete picture of trading data and trends from European venues, entirely free of charge. Platometrics has already garnered hundreds of active users, and positive feedback from across the board.

Mike Bellaro, CEO of Plato Partnership, said:

“The metrics provided by Platometrics offer an easily accessible and coherent view of a large complex data set. This was previously only possible with a large data warehouse and understanding of complex data analysis tools.”

Sign up for Platometrics for free HERE

AIR Summit London 2.0

The Plato Partnership and AIR Summit are excited to be returning to London in 2020 for AIR Summit London 2.0.  Please save the date for this invitation-only event on 7th May in Canary Wharf. You can find out more and request an invite via AIR Summit.

AIR is the only community and event focused exclusively on emerging technology and innovation improving the investment process. It brings together senior level decision-makers from the world’s leading investment firms across trading, portfolio management, research, data science and risk management functions. They curate leading-edge technology firms offering solutions that improve decision making in the investment management process.

AIR Summit London 2.0 – In Collaboration with Plato

7 May 2020

Credit Suisse Conference Centre, 20 Columbus Courtyard, Canary Wharf, London

Plato Partnership and AIR Summit are excited to be returning to London in 2020 for AIR Summit London 2.0 on 7 May in Canary Wharf for this invitation-only event. You can request an invitation here.

AIR is the only community and event platform focused exclusively on emerging technology and innovation for improving the investment process. The event brings together senior level decision-makers from the world’s leading investment firms across trading, portfolio management, research, data science and risk management functions. Additionally, there will be cutting-edge technology firms showcased at this event who will be demonstrating their solutions for improving decision making in the investment management process.

The inaugural London event – AIR Summit London 1.0 – last May was oversubscribed as we convened 150 senior investment professionals representing leading asset managers, investment banks, exchanges, technology companies and members of the venture community, among others.  Delegates experienced provocative discussions from distinguished keynote speakers and panelists, as well as presentations from eleven emerging AlphaTech companies, advancing innovation in capital markets. Total assets under management represented $25 trillion and this year we are looking to expand on this success in 2019.

There are a few additional ways to participate in this year’s event, AIR Summit London 2.0. There are Corporate Memberships, Sponsorship and limited exhibitor opportunities on offer. Should any of these options be of interest, you can contact the AIR Summit team via their website.