Went along to the Intel Faster Trading event last night – overall a good event, interspersed with the usual buzzword bingo from some of the vendors presenting/talking! First up was someone from Credit Suisse, fundamentally doing a sales pitch on their algorithmic trading capability to the buy side. Some points on MiFID:
- MiFID fundamentally aimed at competition and reducing cost of trading
- Median trading spreads in Europe about 5x US median
- Median trading latencies in Europe about 18x US median
Put forward that there would be around 10 alternative trading venues in place by 2009 (seems low?). Existing MTFs included LiquidNet (received +v feedback on them from NY contact), ITG and Chi-X. Key point was that Credit Suisse said that LiquidNet and ITG had so far excluded sell-side brokers and hedge funds, so as to increase confidence in the venue amongst the buy-side (in the absence of "predators"!).
Credit Suisse then listed off planned MTFs including BATS Trading, Plus Markets, Equiduct, Turquoise, Euro Millenium, Open Match and interestingly (given it is an exchange not a start-up MTF!) NYSE Euronext with their DarkPool offering.
Big pitch on Smart Order Routing (SOR) capability, saying that Credit Suisse averages a saving of 1.7 basis points (to I am not sure what, probably exchange/single venue trading). Interesting that they say the important focus is moving from low latency to transaction processing speeds (echoing some earlier feedback on the focus moving to getting shorter message lengths to increase throughput).