SunGard has launched a U.K.-based electronic agency broker-dealer to serve the sponsored access and high frequency trading market evolving in Europe.
The new firm, SunGard Global Execution Services, went live in late September, early October time frame, and is able to trade into all the exchanges it has memberships on. "I think the strategy is clearly defined when you look at the individual market segments we are targeting," commented Dave Mishoe, managing director at SunGard based in London.
The impetus for launching SunGard Global Execution Services, came from SunGard's U.S. clients who are struggling with the ability to expand into international markets and understand the complexity and clearing costs, said Mishoe, in an interview with Advanced Trading on Friday.
SunGard also sees an opportunity to serve regional broker dealers in Europe that are not comfortable giving up their order flow to larger tier one global firms competing for the same underlying investors in their home markets. SunGard has several hundred regional brokers on its network through the October 2008 acquisition of Paris-based trading technology provider GL Trade.
SunGard will also address the ongoing liquidity fragmentation in Europe evolving in the wake of MiFID and rising execution and clearing costs "The timing post MiFid was fantastic in the wake of rapidly fragmenting markets and all the MTFs and regional firms wanting to trade cross border but unsure of where to place their bets in terms of memberships and technology infrastructure," said Mishoe.
"You're seeing a lot of the regionals giving up their executions to the larger firms, go out of business or consolidate," said Mishoe, who said SunGard could help them achieve best execution, since they are concerned that the larger firms are internalizing the order flow and in general, they lack transparency into how their orders are being executed. Whereas in the past, brokers could be guaranteed best execution on the London Stock Exchange, with the fragmentation equity markets in London, now 40 percent of the liquidity is traded away from the primary market. "We allow them to get direct access to their MTFs and exchanges, access to value added technology " algorithms, smart order routing as well as complete transparency into the trading model," said Mishoe.