Forefront Communications

Forefront Week in Review: October 14, 2018

Forefront

Sam Belden

Sam Belden

Welcome to the Forefront Week in Review, where we take another look at top recent stories from the action-packed world of trading and market structure.

This week, the decline of legacy technology providers continued to make waves across Wall Street. In his Monday article “End of the Line for Buy-Side OMS?,” Rob Daly of Markets Media explained why the traditional OMS is often seen by the buy side as clunky, expensive and ultimately impractical. His message echoed LiquidityBook CRO Sean Sullivan’s “For True TCA, Buy Siders Must Pierce the Cloak of Secrecy Around Tech Fees” from last week, and with the amount of innovation occurring in the space today, it seems the debate over how firms can best achieve their technology goals will continue to rage.

Other top stories included Jason Karp of Tourbillon Capital Partners shuttering his flagship hedge fund, AllianceBernstein engaging in high-level talks to acquire Autonomous Research, and Adam White’s move from Coinbase to Bakkt.

This week’s Week in Review features stories by Frank Chaparro of The Block, Samuel Agini of Financial News and Beecher Tuttle of eFinancialCareers, among others. Keep scrolling for more, and don’t forget to subscribe to the Forefront Trading Digest if you’re not on our list already.

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Broker News

Young Google, Facebook Alums Flocking to This High-Paying Trading Firm
eFinancialCareers| Beecher Tuttle

While Jump Trading still minimizes its public visibility, the firm seems to have a sterling reputation 3,000 miles away in California, where many blue-chip recruits from Google and Facebook leap at the chance to join the Chicago firm. At least 27 former Google and Facebook alumni currently work at Jump Trading, with the vast majority having interned at the tech firms or worked full-time for a short period of time, according to LinkedIn. The mutual attraction between Jump and former Google and Facebook juniors seems relatively new. Roughly two-thirds of the aforementioned hires have been working for Jump for three years of less.

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Exchange, ATS and Clearing News

Morgan Stanley Picks Paris for Stock Trading Venue
Financial News | Samuel Agini

Morgan Stanley has chosen to base its new venue for trading stocks in Paris, as it prepares to go head-to-head with rival banks and exchanges under new European Union trading rules. Financial News revealed last month that the US investment bank was preparing to launch a regulated multilateral trading facility in a bid to provide asset managers and hedge funds with an alternative venue to buy and sell shares. The move pits Morgan Stanley into direct competition with rivals Goldman Sachs and UBS, which both operate MTFs in Europe, and traditional exchanges across Europe, including the London Stock Exchange.

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Vendor News

End of the Line for Buy-Side OMS?
Markets Media | Rob Daly

Buy-side order management systems may have reached an evolutionary dead end as trading automation and multi-asset trading continues to grow. “The OMS has evolved into a sort of all-in-one system that, by its nature, was bound to hit limitations in terms of servicing every need of a portfolio manager, the middle office, operations, compliance and the buy-side trade,” John Adam, senior director, portfolio management & trading solutions at FactSet, told Markets Media. Many buy-side firms are starting to rationalize their investment in their OMS platforms and thinking of retiring their platforms.

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Buy Side News

Tourbillon Hedge Fund to Return $1 Billion in Latest Closure
Bloomberg News | Saijel Kishan

Jason Karp, who six years ago started his Tourbillon Capital Partners, is closing his main fund after losses, effectively saying that the hedge fund model is broken. He plans to return the more than $1 billion to investors at the end of the year, according to a letter sent to clients Monday that was viewed by Bloomberg News. Karp said that while his equities hedge fund, the Tourbillon Global Master Fund, had outperformed in its first three years of business, it hadn’t met expectations recently.

[minti_button link=”https://www.bloomberg.com/news/articles/2018-10-08/tourbillon-hedge-fund-to-return-1-billion-in-latest-closure” size=”small” target=”_blank” lightbox=”false” color=”orange” icon=””]Read More[/minti_button]

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M&A/Investment News

AllianceBernstein in Talks to Buy Autonomous Research
Financial News | David Wighton

Autonomous Research, one of the leading independent stock analysis firms in the City of London, is in advanced talks about a $110m sale to AllianceBernstein, the US investment management and broking group. Bernstein is offering to pay $110m over a five-year earn out for the business, which will move into Bernstein’s offices but continue to operate as a separate unit, people close to the discussions said. News of the proposed deal comes amid expectations of consolidation in the market for stock research, following the introduction of new European share trading rules at the start of 2018.

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Regulatory & Legal News

Supreme Court Denies Exchanges’ Request to Take Up High-Frequency Trading Case
S&P Global Market Intelligence | Declan Harty

The U.S. Supreme Court has rejected a request from the largest U.S. stock exchanges to hear a case over whether they systematically favor high-frequency traders. Brought in 2014 by a group of pension and retirement funds along with the city of Providence, R.I., the case has raised questions over whether exchanges owned by ICE, Nasdaq and Cboe sell and offer products that illegally favor Wall Street’s fastest traders over larger, slower-moving institutional investors.The legal battle between the exchanges and the plaintiffs will continue in the federal district court, where it was sent in 2017 after the Second Circuit’s decision.

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Blockchain & Crypto News

Coinbase’s Adam White Is Joining Bakkt as Its COO
The Block | Frank Chaparro

Adam White, Coinbase’s fifth employee and the person who led the development of its institutional-aimed businesses, is joining Bakkt, the cryptocurrency venture at ICE, the parent company of the New York Stock Exchange, people familiar with the hire tell The Block. White has been hired by Bakkt to serve as its chief-operating officer, reporting to Kelly Loeffler, the chief executive officer of the new cryptocurrency venture. White, who joined Coinbase in 2013, built out its institutional exchange, previously called GDAX, as well as a number of institutional businesses aimed at luring Wall Street to crypto.

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That’s all for this week. Don’t forget to subscribe to the Forefront Trading Digest for more headlines like these.