Institutional brokerage Convergex needed more than just management tweaking when Eric Noll was named CEO, in November 2013. Within weeks Convergex would agree to pay more than $150 million to put accusations of trading misconduct and overcharges behind it. Noll then went to work on focusing and redefining the privately held, New Yorkbased company as an agency brokerage; it currently has more than 3,000 clients worldwide. We dont do anything but execute transactions in the marketplace, says Noll, 53, who was executive vice president of transaction services at Nasdaq OMX Group from 2009 to 2013 and one of the leaders of quantitative brokerage Susquehanna International Group for 15 years before that. We dont do any market making, research, investment banking or lending. We are to a large extent conflict-free in that we dont accept payment for order flow. The 520-employee organizations simply stated objective is to build out the electronic algo that works best on behalf of institutional investors. The firm offers algorithms for more than 40 markets and runs one of the only U.S.-registered dark pool for options. Convergexs Millennium alternative trading system does nothing but capture midpoint, or between-the-match, spreads for equity trading and has, in effect, a built-in speed bump. It routes to our data center, Noll explains. That gap, if you will, prevents latency arbitrage from occurring in equity execution. Noll, who earned an MBA from Vanderbilt Universitys Owen Graduate School of Management, observes that institutional investings technological advancements have been mainly on the front end around execution, venues, speed, communication. There hasnt been a lot of attention paid to what I call the plumbing, or what happens after the trade has occurred. One likely route to making posttrade plumbing safer and more efficient, he says, is going to be the blockchain and seeing how it works in the back-office space.
2016 Trading Technology 40Click below to view profiles