The Gateway to Algorithmic and Automated Trading

Just a lot of hot air?

Published in Automated Trader Magazine Issue 09 Q2 2008

Why, in the era of webinars, wikipedia and www.automatedtrader.net, do people still go to conferences?

Why, in the era of webinars, wikipedia and www.automatedtrader.net, do people still go to conferences? Aren't all the research tools and market intelligence you could possibly need already at your fingertips? Well, not quite all. Despite the devilish details you can summon up in an instant from the bowels of the world wide web, there is still no substitute for eating, drinking and sleeping with a subject for a couple of days among like-minded folk. Deprived of all that is normally considered necessary to sustain life - natural light, fresh air, five fruit-and-veg a day, broadband connections - conference attendees feed instead on gossip, hearsay and rumours that may just help them make important decisions back at the coalface.

Automated Trader didn't so much unveil astonishing truths at TradeTech Paris as confirm some suspicions. For example, reciprocal liquidity-sharing arrangements between Europe's new dark pools and trading venues are non-existent. Negotiations are in such an advanced state that Turquoise CEO Eli Lederman met Howard Edelstein, his counterpart at NYFIX, for the first time in the CNIT exhibition hall. And although Chi-X claims to be in discussion with two dark pools, one leading broker admitted to having just one deal in place. In the US.

It was also clear that the buy side is thoroughly disenchanted with MiFID and best execution, barely six months in. A poll held at the conference revealed that 44 per cent of delegates believe that 'everyone has a different definition' of best execution. This is strange, because several brokers have been trotting out the very same definition since November. Asset manager: "Can you deliver best execution in Europe?" Broker: "Why certainly, we connect to Chi-X". (This answer is even given when the broker is not directing orders to the multilateral trading venue.) Stranger still that this definition is considered appropriate by brokers when Chi-X itself doesn't even accept it and will route orders to other venues if it can't meet required criteria.

But those that still believe in a truly pan-European equity trading market will have been cheered by a voice from beyond the conference hall that raised a subject that had hitherto lacked attention in it. In a well-timed speech, Charlie McCreevy, European Commissioner for Internal Market and Services threatened regulation in the event of further delays to the implementation of the Code of Conduct for interoperability between clearing and settlement infrastructures. If it's true, as Knight Capital's Tom Joyce noted in his presentation, that "what the regulator wants, the regulator gets", there is hope that MiFID will defy the cynics and the barriers to competition will be truly dismantled.

You also attend conferences for the stories you could tell. Like the one about the red double-decker London bus hired by Progress Apama to take delegates partying on Wednesday night. The bus got stuck under a bridge en route to the venue (the Parisian transport infrastructure not having been designed for such vehicles) and had to wait half an hour for two somewhat rotund French mechanics to free it by releasing air from the tyres, thus lowering the bus. But because the tyre valves were facing in, rather than out, the passengers then endured a further half-hour wait for the arrival of a third mechanic who was thin enough to crawl under the bus and release the air from the tyres without having the air subsequently released from him. You won't find that one on the web. Not for a couple of weeks, anyway.