The Blotter (formerly known as Insights) cuts through the noise to explain the issues that impair your trading desk, undermine your investment process, and cloud your business strategies.  Subscribe to The Blotter's RSS feed.  Find our latest thinking on market structures, technology, and policy to take control of the information you need to set a course in the right direction.

What Makes an Exchange a Unique Institution?

I recently received my copy of the Winter 2014 Journal of Trading.  Quickly scanning the journal’s cover, I began flipping through to an article on real-time TCA visualization.  I stopped, when I came across the title which I reuse for this comment.  The Journal piece is an edited manuscript of a panel session of the same title held during a conference, organized by Robert Schwartz of Baruch College in New York.  The participants, led by Andy Brooks of T. Rowe Price Associates, are well-known in the industry, and I recommend a read by anyone who did not see that crew in action.

Big Data, Big Decisions: The Coming Sea Change in Technology Investments

Market participants do not need to be told that they are working in an era of Big Data. They experience it every day. However, developing an appropriate response is going to change the daily experience in a number of important ways. The relationship with technology will inevitably change. Internal relationships will be altered. And analytics will dominate any list of required capabilities.

Living in the Post- MiFID II World

On January 14th, Michel Barnier, the European Commissioner in charge of financial services in the European Union (EU) welcomed the agreement in principle reached on rule changes to the Markets in Financial Instruments Directive (MiFID II/ MiFIR).  Barnier declared that although the speed of implementation was not ambitious enough, the agreement still represented “a key step towards establishing a safer, more open and more responsible financial system and restoring investor confidence in the wake of the financial crisis” (see: http://europa.eu/rapid/press-release_MEMO-14-15_en.htm?locale=en).

Commission Spending Under the Microscope

The unbundling of research and trading has been a discussion topic for many years both globally and in Asia. While in theory there are many good reasons to unbundle, the practical implications have often made it difficult for asset managers to do so. However now several important business factors are pushing Asia-based fund managers to review their processes and consider how they value research and trading, while using more sophisticated tools to manage and report on who and what they pay.

The Cost of the D-Quote

Traders commonly use market-on-close (MOC) or limit-on-close (LOC) orders to participate in the NYSE closing auction. An alternative mechanism is the D-Quote.Unlike MOC/LOC orders, which must be submitted prior to 3:45 unless offsetting a Regulatory Imbalance1, D-Quotes can be submitted or modified until 3:59:50,regardless of the current imbalance. Given the greater flexibility of D-Quotes, why don’t traders always use D-Quotes when participating in the close?

German Federal Elections and the Impact on the European Agenda

With the German Federal Elections occurring Sunday, European investors are curious about what impact the elections may have on the European regulatory environment. In this version of The Blotter, ITG's European General Counsel, J.P. Urrutia, summarizes some of the expected results and potential impacts, highlighting Germany's importance to regional policy.

European Financial Transaction Tax suffers a severe setback

In this edition of The Blotter, Juan Pablo Urrutia, European General Counsel, weighs in on the Financial Times report that The Council Legal Service is advising the national governments that the European Financial Transaction Tax (FTT) is illegal.

Canadian Order Flow Trends: Effect of NASDAQ Outage on Canada

In this edition of The Blotter, Doug Clark, Managing Director, Head of Research, and Dora Lee, Vice President of Research, provide an update on the order flow trends in Canada as well as weigh in on with the effect of the NASDAQ outage in Canada.

What’s the meaning (& Impact) of “Meaningful Price Improvement”?

Starting May 26th the Australian regulator (ASIC) had new market integrity rules (MIR) relating to pre-trade transparency exceptions coming into affect. Rule 4.2.1 of ASIC MIR (Competition in Exchange Markets) was revised to introduce tiered thresholds for block trading (also known as “Block Specials” or just “Specials”), while also introducing meaningful price improvement exception to pre-trade transparency (replacing the “at or within the spread” exception) under rule 4.2.3.

Canada Intraday Volume Profiles

It is important to have accurate intraday volume distributions for efficient order execution. In this report we review the new intraday volume profiles created by ITG Financial Engineering for Canadian securities, including cross-listed stocks, ETFs and several other types of exchange traded instruments. Notably, the ETFs tend to have distinct profiles from equities, mirroring the unique features of their underlying baskets. The new intraday volume profiles combine intelligent grouping and smart noise reduction techniques to obtain stable stock-specific profiles for all securities. ITG Logic and ITG Algorithms for Canadian securities will have this intraday volume profile information in near future.

See older issues of The Blotter