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TRADERS Q&A: Bea Ordonez, OTC Markets Group
Traders Magazine Online News, December 18, 2018
So, what can the markets expect going forward?
In an interview with Traders Magazine’s editor John D’Antona Jr, OTC Markets Group’s CFO Bea Ordonez gives her views on what’s in store for global execution, clearing and the exchanges in the coming year.
Ordonez joined OTC Markets Group in 2015 as Chief Financial Officer. She has more than 20 years of experience in the financial services industry. Prior to joining OTC Markets Group, Ordonez served for 13 years as Chief Operations Officer and Managing Director at Convergex Group, a global brokerage and trading-related services provider. Prior to this she served as Chief Financial Officer at G-Trade Services, a broker-dealer then owned by Credit Lyonnais Securities Asia, providing global execution and clearing services. Earlier in her career, Bea worked at Marsh & McLennan and held tax consultant roles at both Price Waterhouse (now PWC) and Arthur Andersen. Lastly, she was Traders Magazine’s 2014 Wall Street Women Trailblazer award winner in 2014.
Traders Magazine: What trends do you see in global execution in 2019?
Bea Ordonez: We are seeing and will likely continue to see a continuation of the post 2008 financial crisis trends, including an increasing regulatory burden for institutional firms coupled with rising costs, compressing margins all contributing to further consolidation in the industry.
Both domestically and overseas, expect to see continuation of longer running trends --- increasing fragmentation with staggering proliferation of new venues especially in Europe (e.g. 175 markets registered at the end of 2007 and almost 300 a decade later) leading to broker dealers facing increasing complexity in accessing global markets and delivering best execution. This, in turn, will continue to drive increased automation and the need for ever increasing complexity and sophistication around OMS and EMS systems requirements etc.
TM: Can you elaborate?
Ordonez: In general, expect to see continued trend towards further electronification of the execution industry with more and more order flow stemming from low touch channels and the provision of algorithmic strategies becoming more commoditized.
Increased emphasis will continue to be placed on transparency. MiFID, and now MiFID II, and notably, the requirement that execution and research services be “unbundled” in Europe will place an ever-increasing spotlight on best execution -- with the analytics component (be it pre-trade, real-time, post-trade etc.) becoming even more important.
TM: How are the U.S. public markets/exchanges going to fare moving ahead? Fee increases, market data, consolidation, etc?
Ordonez: The larger U.S. exchanges have, over time, developed and maintained a business model that serves the large cap, blue-chip companies well, while serving the needs of early and venture stage companies less effectively.
For many years, IPOs were considered the hallmark of success for startups and entrepreneurs. More recently, the high costs associated with completing an IPO on an exchange, and the significant ongoing regulatory and disclosure burdens of being public, coupled with the ready availability of capital in the private markets has certainly impacted many companies’ thinking in this area.
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