After he left his post as a managing director in Electronic Trading Services at Bank of America Securities in May, the industry was buzzing about where Rob Flatley would surface. Well, he has landed a new role at Deutsche Bank Securities as managing director and global head of electronic execution for the equity asset class. Based in New York, Flatley reports to Jon Hitchon, head of global prime services, and Robert Karofsky, head of global markets equity in North America. Advanced Trading's Editor-at-Large Ivy Schmerken chatted with Flatley to find out which priorities are topping his global agenda.

AT: What are your responsibilities and goals in your new position?

Flatley: I'm in charge of electronic execution for the equity asset class, which includes equities as well as synthetic equities, equity swaps, etc. Deutsche Bank has an incredibly powerful global brand, and if you look at the league tables and in almost any product set, whether it's equity trading or equity derivatives or synthetic swaps, we're No. 1 or No. 2 in every one of those categories.

The thing we haven't done yet is really build a strong electronic franchise that leverages that powerful position. My goal is to put an electronic franchise in place that allows us to capitalize on our existing position in the market and then give the electronic business lift into the market. We have a very formidable electronic business at certain levels of the market - I'm going to bring that together as a cohesive global brand and offer value-added services to our clients.

AT: Does Deutsche Bank have an electronic trading platform?

Flatley: We have a very robust and leading connectivity platform that provides direct market access into global market trading centers - Asia, Europe and the U.S. - for firms that want to trade directly in those markets electronically. We also have a good footprint in emerging markets as well. On top of that connectivity, we have algorithmic trading, so as a supplement to just basic connectivity and DMA into that market we also provide algorithmic trading as a value-added service.

AT: What are your top priorities for the rest of 2006 and into next year?

Flatley: There's a huge upswing in terms of firms looking to do electronic cross-border trading. Interestingly enough, if you look at the electronic flow at DB, 30 to 40 percent of our flow is actually cross-border. That's because we've really focused on the breadth of our platform and connecting to markets and helping people transact trades across borders. And, more and more firms are looking for that type of service to be delivered. I want to build a lot of value-added services around cross-border execution, not only from an access perspective, but analytics as well as the important things on the back-end.

You know if you trade a security outside of the U.S., you've got to have an FX component, and rather than have that in two separate transactions, wouldn't it be an incredible value-add and a differentiator to automatically deal with the FX component as part of your equity transition? That's what the buy-side wants.

AT: What are you doing in emerging markets?

Flatley: Because we've got a global presence and footprint, we actually can provide not only basic trade execution ... in those markets, but also a lot of special products or synthetic vehicles to allow firms to enjoy the benefits of investing in markets without having to incur some of the trading risks. ... A good example is the India Top 10 Select, which are the 10 largest market-cap names in India. We've created a synthetic equity around that top 10 select group and allow you to trade that on the Frankfurt exchange. Firms want to trade electronically [and] ... make an investment in a certain region, but they [might not] want to incur the administrative burden of owning stocks in that region from a corporate-actions or withholding-[tax] perspective - we can provide them with either a connection into the market or a special-purpose synthetic equity that allows them to invest in those stocks without ultimately really having to transact in that market. ... My job is to connect our clients to those markets where they prefer to trade electronically.

AT: What are hedge funds demanding from electronic execution services?

Flatley: Another big driver in the equity derivative area ... is equity swaps. When a hedge fund buys stock and [it has] investors who are domiciled in another country, they end up having to do a lot of administrative work around that, such as if there's a dividend paid on that. They have to pay the withholding on that or retain the withholding for the client. It ends up being an asset-servicing administration burden. ... So what a lot of funds are doing now is using equity swaps to access non-U.S. markets. It's a very simple concept: They send in the order for the security, we execute the order and provide it as a swap back to the client, so that client owns the swap - we own the stock. Then we just continually revalue the swap instruments relative to the stocks that we've traded. ...

... This is becoming a very popular vehicle for hedge funds, and most of those funds want to do this electronically because they generate huge lists of stocks. Deutsche Bank is really the innovator in the equity swaps area and holds an incredible cache in that industry in terms of expertise and innovation, and it's just really exciting to come in and build an electronic capability around that.