Bid Out with Peter Haynes TD Securities

In Episode 61, we finish the second of a two-part series on European Market Structure with our expert witnesses from the region, James Baugh, Head of European Market Structure for TD Cowen, and Dermot Dunphy, Head of Trading for M&G Investment Management. In part two, we drill down on the impact of RobinHood's arrival to the European trading landscape, the shift to the close of volumes, the renewed push for a shorter trading day and the timeline for T1 in Europe and the UK.  We finish up with an update on the high-profile and controversial topic of a Consolidated Tape in Europe and the potential for a single-securities regulator in Europe that could be a first step towards a centralized listings platform for the EU countries.

This podcast was originally recorded on March 18, 2024

Chapter Headings:

0:55 - The Impact of RobinHood's Arrival on Retail Trading

8:33 - Shift to the Close – Are MOC flows Accessible?

11:25 - Renewed Push to Shorten European/UK Trading Day

23:28 - T + 1 Implications and Timeline for European/UK Move

27:25 - Consolidated Tape and Market Data Costs

32:02 - Case for a Single European Regulator and Potentially One European Listings Platform

Guests:

James Baugh, Managing Director, Head of European Market Structure, TD Cowen

Dermot Dunphy, Deputy Head of Equities Dealing Desk, M&G Investments

Disclaimer:

This podcast should not be copied, distributed, published or reproduced, in whole or in part. The information contained in this recording was obtained from publicly available sources, has not been independently verified by TD Securities, may not be current, and TD Securities has no obligation to provide any updates or changes. All price references and market forecasts are as of the date of recording. The views and opinions expressed in this podcast are not necessarily those of TD Securities and may differ from the views and opinions of other departments or divisions of TD Securities and its affiliates. TD Securities is not providing any financial, economic, legal, accounting, or tax advice or recommendations in this podcast. The information contained in this podcast does not constitute investment advice or an offer to buy or sell securities or any other product and should not be relied upon to evaluate any potential transaction. Neither TD Securities nor any of its affiliates makes any representation or warranty, express or implied, as to the accuracy or completeness of the statements or any information contained in this podcast and any liability therefore (including in respect of direct, indirect or consequential loss or damage) is expressly disclaimed.

Episode 60 is the first of a two part deep dive on European Market Structure, a topic we have not covered in several years on the podcast. As we learn in the two episodes, a lot has changed since we last covered the space. Helping us get up to speed are two experts in the region, James Baugh, TD Cowen's Head of European Market Structure, and Dermot Dunphy, Head of Trading for M&G Investment Management. In this episode, we cover the anatomy of an execution for a block sized order and how it changed over Dermot's career, the existential threat faced by the LSE and UK to maintain its place amongst the leading global capital markets, and an introduction to some of the Made in Europe market conventions.

Chapter Headings:

7:23 - Anatomy of an Block Order – What has Changed - 2001 vs 2024?
14:44 - LSE Defending its Turf
23:03 - MTFs, Systematic Internalizers and Other Made in Europe Conventions

This podcast was recorded on March 18, 2024

Guests:

James Baugh, Managing Director, Head of European Market Structure, TD Cowen

Dermot Dunphy, Deputy Head of Equities Dealing Desk, M&G Investments
Disclaimer:

This podcast should not be copied, distributed, published or reproduced, in whole or in part. The information contained in this recording was obtained from publicly available sources, has not been independently verified by TD Securities, may not be current, and TD Securities has no obligation to provide any updates or changes. All price references and market forecasts are as of the date of recording. The views and opinions expressed in this podcast are not necessarily those of TD Securities and may differ from the views and opinions of other departments or divisions of TD Securities and its affiliates. TD Securities is not providing any financial, economic, legal, accounting, or tax advice or recommendations in this podcast. The information contained in this podcast does not constitute investment advice or an offer to buy or sell securities or any other product and should not be relied upon to evaluate any potential transaction. Neither TD Securities nor any of its affiliates makes any representation or warranty, express or implied, as to the accuracy or completeness of the statements or any information contained in this podcast and any liability therefore (including in respect of direct, indirect or consequential loss or damage) is expressly disclaimed.

In Episode 59, we are joined by J.W. Verret, professor at the Antonin Scalia School of Law at George Mason University, to discuss a key tenet of rulemaking for US Government Agencies known as the Chevron Deference (or Doctrine). The Chevron Deference is a 40-year-old Supreme Court doctrine that empowers agencies such as the SEC to enact rules in areas of jurisdiction that may not be clearly defined in the law. The doctrine states that Courts "defer" to agencies in areas of ambiguity, the thinking being that agencies have staff that are subject matter experts. However, the limits of this power are often tested in court when agencies propose rules that plaintiffs suggest exceed rulemaking authority.



Recently a case that could impact Chevron – Loper Bright Enterprises vs Raimondo - made it to the Supreme Court. Loper vs Raimondo is a case that challenges a ruling by the National Marine Fisheries Service (a subsidiary agency of the US Department of Commerce) over who should pay for federal observers placed on Herring fishing boats in Maine. The outcome of this ruling could alter or eliminate Chevron and lead to a material erosion in the rulemaking powers of US government agencies including the lengthy agenda of proposed rules at Chair Gensler's SEC. Interestingly, as we learn in this episode, the one area of SEC rulemaking that might be immune to a weakened or eliminated Chevron Deference is equity market structure. Tune in to learn why and get Professor Verret's take on this important case and its implications for Gensler's SEC rulemaking agenda.

Chapter Headings:

1:25 - What is the Chevron Deference?

4:38 - Loper Bright Enterprises vs Raimondo

9:10 - Implications for the Gensler Rulemaking Agenda

11:30 - How Agencies Write Rules Without Chevron

15:00 - Why Equity Market Structure Rules Might be Exempt?

Guests:

J.W. Verret JD, CPA/CFF, CFE, CVA, Associate Professor, Antonin Scalia Law School, George Mason University

Disclaimer:

This podcast should not be copied, distributed, published or reproduced, in whole or in part. The information contained in this recording was obtained from publicly available sources, has not been independently verified by TD Securities, may not be current, and TD Securities has no obligation to provide any updates or changes. All price references and market forecasts are as of the date of recording. The views and opinions expressed in this podcast are not necessarily those of TD Securities and may differ from the views and opinions of other departments or divisions of TD Securities and its affiliates. TD Securities is not providing any financial, economic, legal, accounting, or tax advice or recommendations in this podcast. The information contained in this podcast does not constitute investment advice or an offer to buy or sell securities or any other product and should not be relied upon to evaluate any potential transaction. Neither TD Securities nor any of its affiliates makes any representation or warranty, express or implied, as to the accuracy or completeness of the statements or any information contained in this podcast and any liability therefore (including in respect of direct, indirect or consequential loss or damage) is expressly disclaimed.

In part two of our series on equity algorithms, we cover algo wheels, the sizzle around Artificial Intelligence in algos, and the process for adding new venues to routing tables. We finish up with a couple war stories from past battles with old school traders that resisted change as well as a look into the future state of algos.

Chapter Headings:
0:50 - The New Shiny Object Everyone Has to Have - Algo Wheels
16:40 - Adding New Venues and Order Types to Algo Routing
21:40 - AI in Algos – is it all Sizzle and no Steak?
28:10 - The Future State of Algos

Guests:

Jennifer Hadiaris, Global Head of Equity Market Structure, TD Cowen

Robert Miller, Head of Global Equity Execution Consulting, The Vanguard Group Inc.

Disclaimer:

This podcast should not be copied, distributed, published or reproduced, in whole or in part. The information contained in this recording was obtained from publicly available sources, has not been independently verified by TD Securities, may not be current, and TD Securities has no obligation to provide any updates or changes. All price references and market forecasts are as of the date of recording. The views and opinions expressed in this podcast are not necessarily those of TD Securities and may differ from the views and opinions of other departments or divisions of TD Securities and its affiliates. TD Securities is not providing any financial, economic, legal, accounting, or tax advice or recommendations in this podcast. The information contained in this podcast does not constitute investment advice or an offer to buy or sell securities or any other product and should not be relied upon to evaluate any potential transaction. Neither TD Securities nor any of its affiliates makes any representation or warranty, express or implied, as to the accuracy or completeness of the statements or any information contained in this podcast and any liability therefore (including in respect of direct, indirect or consequential loss or damage) is expressly disclaimed.

In the first of a two-part series on equity algorithms, Episode 57 of Bid Out focuses on why VWAP, a much maligned trading benchmark representing "average" execution performance, still remains popular with buy side traders. Robert discusses proper benchmarking for VWAP strategies as well as the process for determining proper participation rates, while Jenny breaks down the importance of distilling traded volume down to the portion that represents tradeable activity to ensure that algo strategies are properly calibrated. We finish part one focused on the growing importance of on close activity, the period the trading day with the most natural liquidity, and the need to incorporate on close strategies into scheduled based algo logic.
Part 2 will be release next Friday on February 2, 2024.

Chapter Headings:

7:53 - Why does VWAP Remain so Popular?
13:44 - Comparing Broker VWAP Algos
17:08 - The Importance of Accurately Predicting Volume
23:45 - Incorporating On Close Strategies Into Scheduled Based Algos

Guests:

Jennifer Hadiaris, Global Head of Equity Market Structure, TD Cowen

Robert Miller, Head of Global Equity Execution Consulting, The Vanguard Group Inc.

Disclaimer:

This podcast should not be copied, distributed, published or reproduced, in whole or in part. The information contained in this recording was obtained from publicly available sources, has not been independently verified by TD Securities, may not be current, and TD Securities has no obligation to provide any updates or changes. All price references and market forecasts are as of the date of recording. The views and opinions expressed in this podcast are not necessarily those of TD Securities and may differ from the views and opinions of other departments or divisions of TD Securities and its affiliates. TD Securities is not providing any financial, economic, legal, accounting, or tax advice or recommendations in this podcast. The information contained in this podcast does not constitute investment advice or an offer to buy or sell securities or any other product and should not be relied upon to evaluate any potential transaction. Neither TD Securities nor any of its affiliates makes any representation or warranty, express or implied, as to the accuracy or completeness of the statements or any information contained in this podcast and any liability therefore (including in respect of direct, indirect or consequential loss or damage) is expressly disclaimed.

In Episode 56, we dig into current index events with representatives of three of the world's most important benchmark providers S&P, MSCI and FTSE who spoke together on a panel at our recent 24th Annual Portfolio Management and Market Structure Conference. Over the past couple months, executives at Blackstone, Palantir and UBER have all highlighted S&P 500 index inclusion as part of keynote discussions about the company, as if index status is part of regular earnings or company updates.  It seems like the role of the index provider, especially in the US with S&P, is becoming even more important by the day, so it is great we had a chance to ask one of the Index Committee members at S&P for thoughts on whether the 500 Index is simply becoming too important. During this 45-minute panel discussion, we cover the concerning trend of domicile changes to the US and overall concentration of the US market in global benchmarks, the debate over multi voting shares and the status of China A shares in Emerging benchmarks.   Finally, we address the likelihood that South Korea moves to Developed in MSCI, an outcome that seems less likely after the country imposed new short selling restrictions.

Chapter Headings:
3:15 - Is there a new domicile rule for Canada?
13:16 - Is the world becoming too US-centric?
18:55 - Is the S&P 500 too important?
28:27 – Multi Voting Shares
33:50 – China – When Will A Share Weighting Change?
39:03 – Extreme Price Moves Ahead of Benchmark Changes

Episode Guests:
Louis Bellucci, Head of Committee Management, Index Governance, S&P Dow Jones Indices
Ricardo Manrique, Head of Strategy, Benchmark & Index Solutions, FTSE Russell
Raman Subramanian, Global Head of Solutions Research, MSCI

Disclaimer:

This podcast should not be copied, distributed, published or reproduced, in whole or in part. The information contained in this recording was obtained from publicly available sources, has not been independently verified by TD Securities, may not be current, and TD Securities has no obligation to provide any updates or changes. All price references and market forecasts are as of the date of recording. The views and opinions expressed in this podcast are not necessarily those of TD Securities and may differ from the views and opinions of other departments or divisions of TD Securities and its affiliates. TD Securities is not providing any financial, economic, legal, accounting, or tax advice or recommendations in this podcast. The information contained in this podcast does not constitute investment advice or an offer to buy or sell securities or any other product and should not be relied upon to evaluate any potential transaction. Neither TD Securities nor any of its affiliates makes any representation or warranty, express or implied, as to the accuracy or completeness of the statements or any information contained in this podcast and any liability therefore (including in respect of direct, indirect or consequential loss or damage) is expressly disclaimed.