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Tuesday, May 13, 2025
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Wall Street Women Awards Winner: Clare Fraser – Rising Star

By
Editorial Staff
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Rising Stars

Recognizing todays and tomorrows leaders, the Rising Star Award is intended for high-impact professionals who will continue to lead the industry for years to come.

Clare Fraser, managing director, strategy, Omgeo

Dont judge a book by its cover-or an opportunity by its location. Even if it requires traveling halfway around the world.

Clare Fraser, managing director of strategy at Omgeo, began her career in her native Australia back in 1996. Little did she know that it would take her from the land down under to Hong Kong, and then to Belgium and later London. And again back to Hong Kong. As she puts it, her passport is well worn and she is never in need of frequent flier miles.

For her, travel and international exposure are the cost of doing business and ascending the financial services ladder. But that cost, jet lag, time away from family and other challenges are well worth it.

[See All The 2013 Wall Street Women Winners]

I really dont think there is a cost when you look at the benefits of working for an international firm, Fraser said. You just cant underestimate the value of working internationally. I strongly believe that for every role Ive had, theres a bonus that offsets any personal cost.

In her 17 years in finance, Fraser added, she has always looked at opportunities deeply and not taken them at face value. I never say no to an opportunity, even if the benefit is not readily seen. Adaptability is her middle name. She estimates that she has lived in 10 cities in the last 15 years.

If you want to be relevant in this business, you have to keep an open mind, especially when it comes to your career trajectory, she said.

And for Fraser that flight plan rivals any transcontinental flight. She began her career in in her native Australia at Macquarie back in 1996, joining the firms graduate training program and landing a position in strategy for the chief executive officer.

She left Macquarie in 1999 and moved to Hong Kong, looking to broaden her knowledge of Asia and finance, and landed at Credit Suisse First Boston. At the investment bank she switched gears and worked in mergers and acquisitions in the firms financial institutions group during the dot-com boom, seeing it from an Eastern perspective rather than U.S.-centric one. She stayed there for three years and in 2001 packed her bags again. This time, she was headed for Europe.

Armed with a thorough knowledge of the Asian and Australian markets, she landed in Brussels, Belgium, and went to work for the European Commission as a consultant. Working in the research directorate general, she found herself leading the strategic assessment of financial control instruments and increasing her knowledge about regulation and its role in the capital markets.

This exposure really helped me understand how things are done in different cultures, she said.

During her downtime away from the commission, Fraser relaunched her career and got an MBA. While studying, she was exposed to 36 different cultures, absorbing their idiosyncrasies to better understand business on a global scale.

Her studies completed, she joined HSBC Securities Services unit and eventually rose to become its global head of strategy, focusing on Europe. She split her five years at the Asia-based bank between London and Hong Kong until leaving in 2011.

Armed with a global education and international pedigree, she joined Omgeo, a firm that delivers post-trade and settlement solutions to global clients. The Depository Trust & Clearing Corp. completed its acquisition of Omgeo in October. Fraser relishes her new role amid the constant technological change in the financial markets. After all, she is a student of change and adaptability.

You have to be adaptable in this environment or any, if you want to be relevant, Fraser said. Never look at an opportunity at face value, and never say no to an opportunity without learning the facts, even if you cant see its immediate value.

Wall Street Women Awards Winner: Jennica Ross – Rising Star

By
Editorial Staff
-

Rising Star

Recognizing todays and tomorrows leaders, the Rising Star Award is intended for high-impact professionals who will continue to lead the industry for years to come.

Jennica Ross, director of strategic relationships, WallachBeth Capital

To fully understand the business of trading, one must be able to see the whole picture clearly, else risk missing something.

Its very easy in trading to get highly specialized, niche-oriented and absorbed in market microstructure, and to lose sight of what the trading industrys goal is, said Jennica Ross, director of strategic relationships at WallachBeth Capital. Thats why she chooses to view things from a client-centric, holistic approach.

We tend to be very critical on what our immediate function is-get down into the weeds-but sometimes we forget to step back and look at the industry as a whole, Ross said. Weve got to challenge ourselves to see what we do on a day-to-day and how it affects our clients and what trends it gives way to.

A self-described big-picture person, Ross is always moving ahead, learning new concepts and implementing fresh ideas that keep her and WallachBeth Capital ahead of the curve. She credits her ethos in part to her liberal arts background-she is a graduate of Princeton University-and to her parents, one a former principal and the other a former teacher.

[See All The 2013 Wall Street Women Winners]

Personally, I take on new challenges, and responsibilities not only in business but also in terms of people, she said. Ive always been interested in the interactions of people and how they adapt to their situations.

Ross found her way to Wall Street by chance, stumbling across an accelerated management training program offered by UBS Wealth Management in 2003. Not one to shy away from a challenge, she entered the two-year program that sent her to business school boot camp. Boot camp helped her acquire the licenses she needed and enabled her to rotate throughout the firms divisions. She spent time in UBSs fixed-income, structured finance, research and credit groups, getting a complete and thorough exposure to business. She seized the opportunities at each business area and made connections along the way.

I joined the training program not just for the sales trading exposure, but also because it was a very holistic program. Thats what is very important to me, Ross said.

After completing the program and remaining with UBS until 2010, Ross moved to the buyside and Guggenheim Investments. She was charged with helping build the firms clientele and joined as its director of strategic relationships. She stayed for two years and left in 2011.

Again ready for a new challenge, she started 2012 at WallachBeth Capital. She told Traders Magazine the firm was looking for someone who had a deep understanding but a broad view of the industry.

My secret to success here (at WallachBeth) is looking at things from a client-centric point of view, Ross said. I think when people look at the trading industry, theyve got to know its a lot bigger than being an individual trader. We need to make sure as a business and industry were looking at what value we are delivering clients from larger perspective.

Canadian Regulators Zero In On HFT

By
Editorial Staff
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The Investment Industry Regulatory Organization of Canada is gathering and analyzing data to determine the impact of high frequency trading on the Canadian stock market.

The goal is to compile a body of data solely attributable to HFT and then release it to academics for further study, according to Deanna Dobrowsky, a vice president in IIROCs market regulation policy department.

We will take a look at HFT trading to see how it impacts market quality, Dobrowsky said at a recent conference in New York sponsored by Baruch College. Right now, we are trying to refine the data to produce an HFT group.

Guiding the regulators research is industry order-to-trade ratios. HFT is associated with high order-to-trade ratios as firms tend to generate a huge amount of quotes, or orders, but a relatively small number of trades. Canadas regulators are concerned that excessively high ratios could harm market quality, according to a just-released report by Tabb Group.

STORY: U.S. Industry Still Grappling with HFT ‘Problem’

From an order-to-trade ratio study conducted last year, IIROC was able to determine that HFTs were responsible for 80 percent of all orders entered in the Canadian market and 35 percent of all trades. Thats not a very high ratio, Dobrowsky acknowledged.

The percent of volume has dipped this year with HFT accounting for only 15 percent of the total. The dip comes after the regulator revamped its fee model. IIROC now charges firms a regulatory fee based on the number of messages they generate.

According to the Tabb report, IIROC is both facilitating and impeding high-frequency trading strategies. Adam Sussman, co-author of the study, applauds the regulator for taking a data-driven approach to its rule-making, but cautions it might find it difficult to keep up with the markets fast-paced technological advancements.

Increasing Volume & Opportunities

By
Editorial Staff
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The global FX market, the world’s largest and most liquid asset class, continues to grow and evolve. It has bucked the trend in volume declines over the past two years that were seen in other asset classes such as stocks and bonds – even with a bottoming in its own trading activity in Q3 2012, it has staged a strong comeback ever since.

Global FX trading volume has seen tremendous growth over the last decade. The most recent BIS figure indicates global FX volume of $5.3 trillion in average daily trade volume, representing a vibrant market compared with other asset classes. Electronic trading has become the main mode of trading in FX and now accounts for more than 60 percent of all trading done in the global FX market. Moreover, Aite Group expects to see electronic trading adoption to continue in the FX market, reaching 70 percent by the end of 2013.

Over the last 12 to 18 months, the FX market has seen emergence of new FX trading venues that are attempting to take away market share away from incumbent players. There are numerous reasons for the entrance of new FX venues. Some of these reasons include:

Traditional electronic venues such as EBS and Reuters have been gradually losing market share to HFT-oriented market-making or proprietary trading firms, providing much-needed hope for new entrants to build attractive levels of liquidity unthinkable even three years ago.

Dealing banks have become increasingly dissatisfied with the current group of FX venues due to (1) what they perceive as certain practices that favor automated trading firms and (2) the outdated trading infrastructures of existing platforms. Both of these may lead to potential opportunities for new venues.

New participants from non-FX markets have entered the space looking for faster, more transparent FX trading venues similar to what they are used to in equities and futures markets.

Continuing regulatory changes in the OTC derivatives markets across different asset classes such as fixed income, commodities, and equities are leading to growing expectations from global FX market participants that similar obligations will be eventually applied to the FX market.

The existence of an FX ecosystem has drastically lowered the cost of entry for new market players.

There are many new emerging trends that will impact the health and dynamics of the global FX market in 2013 and beyond. First, as the FX market has gone more mainstream and FX has become accepted as a legitimate asset class, a genuine, industry-initiated effort seeks to introduce enhanced transparency into the market and provide a fair trading environment for both institutional and retail clients alike.

Second, fueled by these industry-led initiatives, the next phase of competition in electronic FX trading market has begun. Over the last 18 months, new FX venues have emerged at a rapid pace often touting increased transparency, low latency, and cost-effective trading as key characteristics of their competitive offerings.

Third, banks rely increasingly on internalization of client order flow to manage their market risk.

Fourth, thanks to new technological innovations as well as by market structural changes as a result of new demand-supply dynamics and new regulations, there are more choices than ever in electronic trading venues. Customers can choose to trade electronically via RFQ/RFS in single or multi-bank platforms, ECNs with streaming quotes and central limit order books, or exchanges.

Fifth, key findings by FX regulatory bodies indicate that the average trade size of spot transactions has already dropped two- to threefold over the last three years, while the number of trades has gone up more than 50 percent during the same period. With expected continued growth in HFT volume and increasing market participation by retail traders, the average trade size of spot FX is expected to decrease even more in coming years.

Sang Lee is co-founder and managing partner of Aite Group. Follow him on Twitter at @aitegroup.

The views represented in this commentary are those of its author and do not reflect the opinion of Traders Magazine or its staff. Traders Magazine welcomes reader feedback on this column and on all issues relevant to the institutional trading community. Please send your comments to Traderseditorial@sourcemedia.com

(c) 2013 Traders Magazine and SourceMedia, Inc. All Rights Reserved.
http://www.tradersmagazine.com http://www.sourcemedia.com/

Strength in Unity

By
Editorial Staff
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The merger between BATS GlobalMarkets and Direct Edge Holdings is expected to close early next year and will bring together BATS’s 164 employees with Direct Edge’s 135. The merge won’t alter the exchange landscape-the plan is to maintain all four of the operators’ exchanges-but it could introduce competition on the market data front. When the two firms come together under the BATS name, Bill O’Brien, currently Direct Edge’s chief executive officer, will take on the role of president. BATS’s Joe Ratterman will become chief executive officer of the combined firm. The two answered a few questions for Traders Magazine.

Traders Magazine: Why merge? To cut costs?

Bill O’Brien: That isn’t the main reason. There is always the ability to streamline operations when you bring two companies together. But it really started for me with the notion that together we could have a better set of products for the customer and help them lower their costs. Help them respond to their business challenges, as opposed to doing something for ourselves. Any good merger should start with that kind of industrial logic. Bringing these two companies together is a significant accelerant to our combined ability to serve the customer. It’s clearly a case where together we can do that in a more powerful and accelerated way than either of us were doing on a stand-alone basis. That’s why it’s so powerful, as opposed to any sort of financial engineering or cost-cutting.

Traders Magazine: Can you give us an example?

O’Brien: I’ll give you a great example. Look at market data. The structure for market data consumption in this industry is really about 40 years old. The legacy exchanges have had data products where consumers are paying the same rates month after month after month. That’s despite the fact that the relative value of that content continues to go down and the cost of producing the data also continues to go down. Direct Edge and BATS have each been making some pretty important inroads into that area. We’ve done really well with getting attribution on our data feed-meaning people quoting in their own name. About 10 percent of the orders on EDGX are executed on an attributed basis. So we’re making inroads there. But when you put the two companies together and realize they have a content set that is bigger than Nasdaq’s. You significantly accelerate the ability to bring competition to that market. You significantly expand the content choices available to the end user and lower his costs at the same time.

Traders Magazine: Why not merge the exchanges? Wouldn’t a couple larger pools be more beneficial?

O’Brien: No. It might help the bottom line in the short term. But it would hurt the customer in the short, intermediate and long term. We want to have as big a tent as possible. These four exchanges represent four materially different ecosystems that our customers benefit from. That’s why EDGX can be the No. 1 exchange destination for retail limit order flow and BATS-Z can be very powerful for electronic market makers. BATS-Y and EDGA each have their own unique ecosystems. That doesn’t mean any of them aren’t going to change over time. We’ll think that through and spend time listening to customers. We’ll certainly consolidate some of the operational backbone behind them. You’re not going to have four groups of people running all four exchanges.

Traders Magazine: Who will own the combined company? Mostly brokers? Will any party divest as a result of the deal?

O’Brien: The ownership structure will be a competitive differentiator and a strength for us. This is a merger-a share deal. Nobody is cashing out. We are recreating the mutualized exchange. The relationship between exchanges and its members has broken down in recent years. Not that for-profit is evil. Any good membership organization should run itself with that mind-set. But when you have an ownership and governance structure where Goldman Sachs, Morgan Stanley, Credit Suisse, J.P. Morgan, Merrill Lynch, KCG, Citadel, Tradebot, Nomura and others can all come around the table and view themselves not just as customers, but partners and key stakeholders … This will keep us closer to the customer; more aligned with the customer. It will help us stay focused on the customer.

Traders Magazine: Why merge? Cost savings?

Joe Ratterman: BATS has always looked for opportunities to grow our business when it makes strategic sense, and I’m sure Direct Edge feels the same way. Both firms share a mission to make U.S. stock trading more competitive for all participants-from the retail investor to institutions-and we plan to leverage our combined resources to create greater market efficiencies for the entire trading community. We believe there are many synergies to be realized by bringing our businesses together, which in turn will benefit our customers.

Traders Magazine: You hav=e stated that you do not plan to merge any of the exchanges. Why not? Aren’t BYX and EDGA very similar? Aren’t BZX and EDGX very similar?

Ratterman: We’ll continue to operate the four order books under the BATS Global Markets brand-the order books are differentiated enough that each has a unique ecosystem and offering trading participants have come to appreciate. As a combined company, we want to offer our customers choice and cost-effective pricing options when it comes to executing their orders, and maintaining the four books does just that.

Traders Magazine: If you aren’t going to merge exchanges, will we see some pricing or other types of coordination among the exchanges?

Ratterman: The plan, after closing, is to migrate the Direct Edge exchanges to the BATS technology so our customers will see one common technology platform when accessing our markets. We will begin the technology migration process post-close, pending regulatory approval. We will also take a close look at all product offerings and pricing strategies and, based on customer feedback, will strive to continue offering best-in-class solutions that best meet their needs.

Traders Magazine: I gather you see possibilities in market data. How does a larger market share help you deliver more data products and/or become more competitive in market data? Because you have more data to deliver?

Ratterman: Market data is an exciting opportunity for us and our customers. As stand-alone organizations, it has been difficult for us to compete seriously in the realm of market data, but by combining two innovative organizations, we will now have the depth and breadth of market data that will be comparable to our major competitors. We believe we can create market data offerings that will be more attractive and cost-effective than what our competitors currently offer.

Traders Magazine: In a recent article, you mentioned the possibility of starting an exchange for foreign exchange. Can you expand on that? A regulated exchange? More of an ECN? Why do this? Is there a need? Users would be brokers? Prices would be transparent? Any color here would be helpful.

Ratterman: We are constantly assessing opportunities in the marketplace that may make sense for us, and FX is just one asset class that looks interesting to us; and we will continue to keep a close eye on that market as well as several others. We have also been paying close attention to the Japanese and Canadian equity markets. Right now we’re focused on completing the deal, and it wouldn’t be appropriate to speculate on future business plans until the transaction is completed.

(c) 2013 Traders Magazine and SourceMedia, Inc. All Rights Reserved.
http://www.tradersmagazine.com http://www.sourcemedia.com/

Citigroup Pushes Pilot for Bigger Ticks

By
Editorial Staff
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Following recent comments by Securities and Exchange Commission Chair Mary Jo White about a pilot program allowing larger trading increments for smaller stocks, one of the industry’s largest market-making firms is promoting a tick-size plan of its own.

Speaking at a recent industry conference, Mike Masone, general counsel for Citigroup’s equities division, said his firm was supportive of such a pilot and was about to send the SEC a letter outlining a possible structure.

[See Traders Magazine Tick Stories]

Importantly, Citi’s plan would not lead to wider spreads, according to Masone. “We shouldn’t be looking to widen spreads,” he said, “where the spreads are already tighter than nickels or dimes.”

Citi’s proposal is three-pronged. It would create three groups of emerging growth company stocks, or those with less than $1 billion in revenues, and apply different quote and trading rules to them. Any pilot would last no longer than a year, but could be extended for another year if the data was inconclusive.

For the first group of stocks, traders could only quote and trade in the same increment.

For the second group, market centers could also allow trading at the midpoint of the bid-ask spread.

For the third group, market makers, such as wholesalers, would be permitted to trade at any point in between the spread. Each group would contain between 100 and 200 securities, Masone noted.

The executive did not mention the size of any new trading increment, but the SEC is considering a range of between two cents and nine cents.

(c) 2013 Traders Magazine and SourceMedia, Inc. All Rights Reserved.
http://www.tradersmagazine.com http://www.sourcemedia.com/

Execs OK with New Dark Pool Rules

By
Editorial Staff
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The Financial Industry Regulatory Authority officially announced new disclosure rules for dark pools and industry executives are OK with them so far.

The rules stipulate that operators of these off-board trading venues report their weekly trading volume and the number of trades for each security. Traders Magazine previously reported that a rule was forthcoming and that a timeline was taking shape for release, comment and approval. Finra officially filed the rule with the Securities and Exchange Commission at the end of September.

[See Traders Magazine Finra Coverage]

“With regards to attributing trade data to certain ATSs, we’re okay with it,” said John Donahue, Fidelity Capital Markets’ head of equity. “But it’s a careful balance between when and how and in what form you make this data available to public and the Street. And at what frequency? We want to make sure that in a low ADV, small or mid-cap name that the distribution of trade data doesn’t necessarily harm the ability of the customer to continue to find and source liquidity.”

Finra has proposed Rule 4552, which will require each ATS to report to Finra volume information regarding transactions within the ATS in securities subject to Finra trade reporting obligations.

Finra will make the reported information for equity securities publicly available on a delayed basis. The regulator has proposed a two-week delay before publishing the reported data on Tier 1 NMS stocks and a four-week delay for all other NMS stocks and OTC equity securities. Furthermore, the proposed rule also requires each ATS to use a single, unique Market Participant Identifier (MPID) when reporting information to Finra.

(c) 2013 Traders Magazine and SourceMedia, Inc. All Rights Reserved.
http://www.tradersmagazine.com http://www.sourcemedia.com/

Braking HFT

By
Editorial Staff
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Should one group of traders have a speed advantage over another? Many in the industry say ‘no’ as they blame high-frequency traders for the market’s ills. At least one academic agrees and has a plan to put the brakes on.

Eric Budish, an associate professor of economics at the University of Chicago, told attendees at a recent industry conference that high-frequency trading drives up costs for investors by harming market makers. He believes a wholesale makeover of the market’s structure from continuous trading to a series of call auctions would give bona fide liquidity providers time to react to the predatory behavior of high-frequency traders.

“A news event can lead to a race amongst high-frequency traders to pick off liquidity providers’ stale quotes,” he said at Baruch College’s annual Financial Markets Conference. “That race manifests itself in an increased cost of liquidity provision. I think we have the wrong market rules in place. My research suggests we should move from a continuous-time market to one of discrete time. Perhaps once per second or once per 100 milliseconds.”

(c) 2013 Traders Magazine and SourceMedia, Inc. All Rights Reserved.
http://www.tradersmagazine.com http://www.sourcemedia.com/

Order Routing Squabble

By
Editorial Staff
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Money managers’ interest in eliminating exchange rebates is meeting resistance from exchanges, brokers and regulators. At a recent industry conference, industry representatives balked at the idea of a pilot program that could drastically reduce rebates or replace maker-taker pricing altogether with a charge on both sides of a trade.

“It would be difficult to change that dynamic,” Joe Mecane, head of U.S. equities at NYSE Euronext, said at the Investment Company Institute’s annual market structure conference.

[See Traders Magazine Coverage on Rebates]

One of the New York Stock Exchange’s largest market makers agreed, arguing that elimination of the rebate would kill his business. “If a flat rate were to go across that business, then that business would be very compromised,” Bill White, Barclay’s head of equities electronic trading, said.

Buyside traders have been lobbying their brokers and the regulators behind the scenes for the change arguing that brokers may be routing their orders to venues that pay the highest rebates rather than those that offer the best execution. In such a case, the broker pockets the rebate and the buyside gets an inferior fill. “Any inducements to order flow routing insert a conflict of interest,” said Andy Brooks, head of equity trading at T. Rowe Price Associates.

(c) 2013 Traders Magazine and SourceMedia, Inc. All Rights Reserved.
http://www.tradersmagazine.com http://www.sourcemedia.com/

He Made A Difference

By
Editorial Staff
-

Tom Steinert-Threlkeld, the former editor of SourceMedia’s Traders Magazine and editorial director of the media company’s Money Management Group, was hit and killed by a car while cycling on a country road near his home in Connecticut on Sunday, October 20.

The world has lost a great journalist and even greater man.

Tom, 59, was an avid biker who regularly peddled 50-plus miles on weekend afternoons. “Our only consolation,” Tom’s wife Kayte wrote on his Facebook page, “was that Tom was doing what he loved to do – riding his bike on a beautiful day and taking photos.”

In addition to his wife and friend, Kayte, Tom leaves behind two sons, Zackary, 26, and Shane, 23. Tom always put family first and he was incredibly proud of his boys’ academic and professional achievements.

[Read Tom Steinert-Threlkeld Stories]

The day after his death, his many friends recalled his soft heart, kindness, generosity, sense of humor and his laugh – which could carry across a room.

His co-workers, past and present, remembered a man of character and integrity, a brilliant and talented journalist, a mentor, and an inspiration to others – someone who made everyone around him better than they thought they could ever be.

Tom could have done anything with his life. But his calling was to be a business editor. He received a degree in journalism from the University of Missouri-Columbia and an MBA from the Harvard Business School. In a letter to Harvard’s admissions board he said that he wasn’t interested in a high-paying job on Wall Street or in a Fortune 500 company. He said he wanted to attend so he could be a better business journalist.

He went on to stints on the business desks of The Fort-Worth Telegram and The Dallas Morning News. Then became editor of Inter@ctiveWeek and other B2B brands.

An entrepreneur at heart, Tom loved new ideas and embraced change.

In 2001, he came up with an idea for a new kind of information technology publication, one that would assign teams of investigative journalists to explore large corporate I.T. projects to find out why some succeeded while other floundered. The result was Baseline, one of the most acclaimed B2B brands of the last decade. Baseline won the highly coveted Grand Neal and was one of the few trade publications ever to be named a finalist for a General Excellence award from the American Society of Magazine Editors.

He joined SourceMedia in 2009 and left just this past June to launch a line of online B2B brands at IBT Media.

Tom believed good journalism could change peoples’ mind and, in turn, change the world. The stories he wrote and edited were read by executives during board meetings, entered into court records during trials, and were often cited by movers-and-shakers in corporate America. He received more editorial awards than he had places to put them.

But Tom also believed each day was a gift. That all anyone had was one day – this day – to make a difference. And whether it was reporting a big story, trying to right the world’s wrongs, helping a stranger, or simply being a friend, Tom made a huge difference each and every day of his life.

He will be greatly missed.

(c) 2013 Traders Magazine and SourceMedia, Inc. All Rights Reserved.
http://www.tradersmagazine.com http://www.sourcemedia.com/

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