Part I: A Q&A with Goldman Sachs' Greg Tusar
Traders Magazine Online News, September 7, 2010
Greg Tusar, head of the Goldman Sachs Electronic Trading business in the Americas, sat with Traders Magazine recently to discuss a number of issues affecting equity trading today. Among the topics addressed were developments in market structure like order routing and order handling, as well how algorithms and dark pools are evolving. An industry veteran of 18 years, Tusar offered some of his insights in this first leg of a two-part Q&A.
Greg Tusar, Goldman Sachs
Traders Magazine: You mentioned that order handling and routing are more complex these days. Could you expand upon that?
Greg Tusar: Now, versus a decade ago, not only would you say that things are a lot different, but there's no question they're incredibly more complex, in terms of how orders are handled and routed.
TM: How so?
GT: I think people are struggling with the process that used to be quite understandable, in terms of trader to sales trader, to two-dollar broker or floor broker, to walking out to the post--or the order was handled by a Nasdaq market maker--to now, a process that is highly automated. How exactly that order is handled is not as easily understood by clients.
It goes to a lot of the things in our Concept Release [comment letter], also. We think the way to deal with that is to not necessarily make the structure simpler, because at this point, given how technology has evolved in the market, to try and simplify it is going to be an uphill battle.
TM: Then, what do you do?
GT: The idea is to make it more transparent so people can at least make more informed choices about which brokers to use, based on the information they've disclosed--making their own order-handling information transparent back to them, which is something a lot of clients have asked for.
TM: Can you give an example?
GT: A lot of clients have worked with their OMS [order management system] vendors and with us to say: I want to know on every execution where that execution took place. And that is something they're now able to use--that information--to make more informed decisions about where to go with the next order.
And so, if you're willing to read the Concept Release response, you might also want to read the Form ATS filings. You know what order types an ATS actually has and how the subscribers use them. This idea that there are dark pools, the more that we can make the exact mechanisms by which those were transparent, the more that will increase confidence in exactly what's happening there.
For more information on related topics, visit the following channels:
