Asset managers trading fixed income are seeking data
scientists to sit alongside traders as
data in the asset class is set to surge
under MiFID II.
Carl James, global head of fixed
income trading at Pictet Asset Management, explained to delegates at
the Fixed Income Leaders Summit
in Amsterdam, he has recently
expanded his trading desk with two
“The buy-side need to be more
proactive with the use of technology and data, we should be using
it ourselves. I just hired two new
people on the trading desk with no
trading background, but they are
data scientists,” James said.
Being able to adequately assess
the quality of data is one area which
has often been highlighted by the
buy-side as a challenge ahead of
Questions have also been raised
as to whether the buy-side will be
equipped with enough data to have
an edge over the banks and become
key players in fixed income markets.
On a separate panel session,
Fabien Oreve, global head of trading
at Candriam Investors Group, explained MiFID II will also provide
the opportunity for junior traders to
step up in fixed income trading.
He told delegates: “Pre- and post-trade transparency will drive fixed
income to more electronic trading
and bring small tickets to platforms
which should improve liquidity.
“In that environment, with more
data and more small tickets, there is
greater possibility for junior traders
to take control of what used to be
controlled by experienced traders.”
Antonio Pilato, head of trading
desk, Generali Investments Europe,
also explained asset managers
should look at how MiFID II will
change the structure of the trading
desk in terms of people, processes
“The portfolio managers need to
put more education in place for the
traders and the trading desk so that
they can better understand how to
use the data that will become available,” he said.
Morgan Stanley has been fined
$500,000 for overcharging client
exchange and clearing fees due
to automated system failures.
An investigation by the US
Commodity Futures Trading
Commission (CFTC) found the
investment bank did not supervise the reconciliation of fees
with the amounts it charged for
transactions with CME, ICE Futures US and other exchanges.
Between 2009 and 2016,
Morgan Stanley overcharged
clients more than $1.5 million
for transactions, and an affiliate
of the bank overcharged clients
more than $1.4 million.
The CFTC said the bank’s automated system failed to account
for, and protect against, the risk
of overcharging customers for
exchange and clearing fees.
“For a substantial majority
of the relevant period, [Morgan
Stanley] had no automated system in place to detect instances
where it may have overcharged
customers for exchange fees,”
the US authority said.
Morgan Stanley has since
fully refunded nearly all of the
affected clients and has modified its automated systems to
ensure potential overcharges are
flagged in future.
Asset managers are looking to hire data scientists who
will sit on the trading desk and work directly with the
Bond trading desks seek data
scientists to work alongside traders
fined $500k for
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