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Plato Partnership Newsletter December 2020

Welcome to the Plato Partnership newsletter, providing you with news, views and exclusive insight on the latest developments in the Plato Partnership, a not-for-profit company bringing creative solutions and efficiencies to today’s equity marketplace.

In our final newsletter for 2020, we take a look at the growth of our key partnerships with Turquoise, Urvin.Compliance, Babelfish and BMLL.
Thank you all for your continued support with Plato. We wish you a peaceful holiday season and look forward to great success in 2021. – Mike Bellaro, Chief Executive, Plato Partnership

A Record Breaking Year for Turquoise Plato

Murray RoosGroup Head of Capital Markets at London Stock Exchange Group reflects on what has been a big year for Turquoise Plato®

We are delighted with the record performance of Turquoise Plato .

It reminds us that we exist to solve our clients’ needs and is further evidence why partnering with customers is the responsible route to driving growth and innovation across our business.

What is clear from our relationship with Plato is that, together as a community of investors, intermediaries, and exchange, we share values and a vision for an open access marketplace that delivers collaboration, innovation, execution.

This relentless focus on the efficiency and quality of what we deliver to our respective clients challenges us to build things, to find better ways to do things, and to improve systems that ultimately benefit end investors for the greater good.

The last few months taught us we can deal with the unexpected.  And we can be sure that in the months and years ahead there will continue to be a lot of change. On behalf of our team, I thank you for your trust.

We look forward to continuing our journey together to serve the industry and our respective clients, to improve ways of working and to innovate in this evolving market landscape in the spirit of cooperation to promote liquidity and new business.

Dr Robert Barnes, CEO Turquoise, Capital Markets, London Stock Exchange Group:

Thank you to our Customers and the distinguished Community of Plato Partnership,

2020 is the year electronic block trading at midpoint became mainstream via Turquoise and London’s capital markets remained open during the extreme conditions of H1 and again Q4, particularly November. The insight is that innovations designed in partnership with customers, such as Turquoise Plato® execution channels and particularly Turquoise Plato Block Discovery™ performed well during volatile and difficult trading conditions helping customers efficiently to get their business done. And with the launch of Turquoise Europe on 30 November 2020, we look forward to a smooth transition into 2021 and the opportunity to grow new business together.

2020 is the year electronic block trading at midpoint became mainstream via Turquoise with Turquoise Plato Block Discovery™ for 1st time representing more than half (57.6% Nov2020 YTD) of all value matched in Turquoise Plato® order book.

  • Figure 1. shows from 2013 to 2020 Nov YTD, left y-axis the aggregate value processed by Turquoise Plato dark pool since 2013 is more than €1.2 trillion, a statistically relevant data set; and right y-axis shows annual value Turquoise Plato Block Discovery divided by Turquoise Plato dark pool total for that year; the insight is that 2020 is the first time electronic block trading at midpoint inside bid offer touch has gone mainstream.

  • Table 1. Turquoise Plato initiatives by 2020 November YTD already has set new annual value traded records

Click here for the full story of Turquoise’s growth and new records in 2020

2021 starts a new chapter for Turquoise, Hard Brexit.

Turquoise Global Holdings Limited, authorised by UK Financial Conduct Authority launches Turquoise Global Holdings Europe B.V. (“TGHE”) authorised by Autoriteit Financiële Markten (AFM) to operate a multilateral trading facility (MTF) in the Netherlands – 30 November 2020, ready for 4 January 2021 EU STO.

Turquoise Europe will offer same functionality as Turquoise today, including our newest Turquoise Plato Trade At Last™ successfully launched on 19 Oct 2020.

  • Turquoise will continue to offer its full stock universe, including UK names – and, when Swiss UK equivalence active in 2021, re-admission of Swiss securities.
  • Turquoise Europe will offer European securities including shares, ETFs/ETPs, and European Rights Issuers (and not UK and not Swiss securities).
  • Our customers are telling us they prefer to avoid splitting liquidity per stock ISIN and thus plan to send orders in European securities onto European venues like Turquoise Europe after end of transition and from first trading day, 4 Jan 2021.

Turquoise Europe 30 November to 11 December 2020 the insight is that Week 1 was an encouraging start, smooth launch after 3 year project.

a.Members successfully entered orders in and matched thousands of trades
b. Orders received and trades matched via all of our order books: TQEX TQEM TQEA
c. Trades acknowledged by all 3 interoperating CCPs: EuroCCP, LCH Ltd, SIX x-clear.

PLIA by PLATO Continues Adoption and Momentum

Since the acquisition of PLIA by Urvin.Compliance in November 2019 and their inclusion as a preferred partner to the Plato Partnership in April 2020, PLIA by PLATO is gaining momentum as the central platform for counterparty management and due diligence.   The new European standard questionnaire has modernized the existing due diligence framework and global asset managers have started to utilise it as part of their best execution process.  Additionally, this standard is now being migrated to other regions, such as the U.S., in order to further streamline the questionnaire process globally.

Bill Stephenson, CEO of Urvin.Compliance, said, “After becoming a preferred partner of the Plato Partnership earlier this year, we have gained significant traction among Plato Partnership members and others across the region who are looking to de-risk the due diligence process with a comprehensive and efficient platform.  With virtually all broker-dealers within the Plato Partnership fully onboarded, we couldn’t be happier with the adoption and value creation for both asset managers and their counterparties.”

With the recent surge in users, PLIA by PLATO has been investing in the platform with direction from the European Advisory Board.  Some recent development activity includes:  custom private questions, a centralised counterparty contact portal, and continued security features and enhancements.  Expected features in early 2021 include algorithm customization and venue preference tools, in addition to risk limit controls.  These features are a high priority for the Advisory Board and will help investment managers communicate desired configurations to all their counterparties using centralized tools and features.

Users of the PLIA by PLATO platform in Europe can now access the new European Standard questionnaire, including the ability to customize the template by deleting or adding existing questions from the PLIA global database or by creating their own proprietary questions.  Since the adoption of the standard questionnaire in July 2020, the most common practice has been to use the 124 question configuration as is, however, some have made modifications around the edges.  The benefit of the standard questionnaire for the broker-dealers is that their responses can be easily pre-populated across their clients after they respond to a given question the first time.  This is also increasing the response times back to their asset manager clients and allowing the asset managers to easily cross-compare responses.

“We are currently at the time of the year where asset managers want to receive refreshed responses from their counterparties as it relates to best execution.  Having a platform and a standard questionnaire for European asset managers is streamlining this process, which can kickstart collaborative conversations around strategies, service, and best practices for 2021.” noted Stephenson.

While 2021 has a full development schedule, PLIA by PLATO is remaining flexible to meet users’ needs as they arise, especially if they can meet a specific regulatory requirement or best execution challenge.

For further information on PLIA by PLATO you can contact the team at support@plia.com

Babelfish Joins Forces with Global Trading Analytics

In June 2020, Babelfish has joined forced with Global Trading Analytics to become GTA Babelfish.  The combination brings together the products and complementary strengths of the two companies to offer:

  • State of the art global multi-asset class transaction costs analysis and
  • Pioneering venue and routing analytics in the equity market.

Throughout the pandemic lockdown, Babelfish continued to work with European brokers to help them build out their file specification.  Twelve brokers and banks have received requests from buy side, with some having received multiple requests.  Four brokers are in final stages of QA, with three brokers and banks in the initial stages of QA or working on agreements.  Babelfish is currently seeking additional investment firms to become proof of concept partners.  Please contact Jeff or Linda at LearnMore@babelfishanalytics.com for more information.

GTA Babelfish launched the GTAB GPS liquidity insight tool to help traders better understand inaccessible liquidity to assist in trading strategy selection.  This web-based tool deciphers and combines FINRA and exchange data to provide a complete picture of the trading venue landscape for single-stocks or a customized list of securities to provide guidance on which venues may provide the most liquidity.  Please contact LearnMore@babelfishanalytics.com for a free trial.

BMLL – Award Winning Platometrics Continues to Gain Traction

2020 has been a very exciting and successful year for BMLL.

Platometrics, which BMLL have built for the Plato Partnership, continues to gain traction with market participants, providing them with a complete picture of trading data and trends from European venues, entirely free of charge.

In fact, BMLL have won two awards for providing the technology behind Platometrics: winning “Best Data Visualization Service” at the 2020 FinTech Breakthrough Award and “Best public cloud-based service” award at the HFM European Technology Awards. The awards recognise that Platometrics is providing market participants with a consolidated overview of liquidity from across Lit, Dark/Grey, Bilateral and Non-Addressable trades and the European best bid offer across exchanges at any specific point in time.

We also highlighted the use case for Platometrics in our May webinar, which featured Dr. Eliot Banks looking at the market state in detail with the unique analytic tools offered by the platform.

BMLL makes 5 years of US Level 3 data available for backtesting and alpha generation

As the demand for data driven insights to improve trading decisions is continuously increasing, so is the need for new, alternative and granular data sets that help industry participants navigate market volatility while maintaining a competitive advantage.  To meet these needs, BMLL has also expanded its data offerings, announcing in October that five years of granular, Level 3 order book data is now available to its US customer base and European funds trading US stocks.

These data sets enable participants to understand how markets behave and unlock the full potential of the predictive power of pricing data over a sufficiently long time horizon to capture a wide spectrum of market scenarios, without the need for complex in-house data cleansing and engineering capabilities.

This ability has previously been the preserve of large systematic funds with in-house capabilities to generate, analyse and ingest these levels of data. With BMLL, quants can now achieve new insights in record time – no longer having to spend 80% of their time cleansing and harmonising data, before they can use it to improve trading decisions and backtest strategies for alpha generation.

BMLL’s Industry Collaborations and Data Partnerships

From April 2020, BMLL’s data and analytics are also available via OpenFin, the operating system of finance currently deployed on more than 275,000 desktops across the buy-side, sell-side, institutions and tech vendors. By building on OpenFin, BMLL provides buy-side users with access to market metrics created from the most granular Level 3 order book data, to analyse and visualise their portfolio over time, delivered directly into existing desktop environments.

Throughout the year BMLL has entered into several high profile data distribution arrangements to give easy access to its unique data and analytics offering across the capital markets community, complementing existing data delivery and distribution capabilities.  BMLL’s distribution partners include Data in Harmony, Crux Informatics and IOWArocks to solidify their US footprint and EOSE for additional European data dissemination.

We look forward to continuing our work with the Plato Partnership in 2021.