<b>[MUSIC]</b>

<b>Hello and welcome to CMXtra, the Capital Markets Exchange podcast. Yes, we are back</b>

<b>after a ludicrously, yes, I'm going to say</b>

<b>ludicrously successful in-person event in London</b>

<b>back in June. We're back on the podcast with more</b>

<b>capital markets, conversations, insights and later</b>

<b>on some intel on the next in-person CMX event. So</b>

<b>stay tuned. On the podcast over the next few months,</b>

<b>we're going to be engaging in conversation with</b>

<b>more experts from throughout the community on a</b>

<b>diverse range of topics. And we're lining up some</b>

<b>really, really interesting stuff. But if there is</b>

<b>something you'd like us to cover or somebody</b>

<b>you'd like us to speak to, then well, do let us know.</b>

<b>Today, well, we're welcoming back two guests from</b>

<b>the in-person CMX event before the summer to share</b>

<b>their vast insights and experience on dealer</b>

<b>wallet share and getting the most from sell side</b>

<b>partners. And the context here is what some</b>

<b>would see as the proliferation of new counterparties</b>

<b>offering liquidity in the market and</b>

<b>different types of counterparties offering different</b>

<b>opportunities versus, for example, tier one</b>

<b>banks, agency brokers and so on. Meanwhile,</b>

<b>cost pressures on the buy side are at least in</b>

<b>some shops, reducing the size and makeup of dealer</b>

<b>panels across different asset classes. Well, here</b>

<b>to share the wealth of their experiences and offer</b>

<b>up some practical advice, whichever side of the</b>

<b>desk you sit, please welcome senior fixed income</b>

<b>trader at Aberdeen, Owen O'Reilly. Hello, Owen.</b>

<b>Good to see you again. Hi there. Good to be back.</b>

<b>Thanks. And former sell side director of market</b>

<b>structure at one of the major sell side firms and</b>

<b>cross asset market structure and e-trading expert</b>

<b>as well as co-chair of Fix EMEA, Matt Coop. Hello,</b>

<b>Matt. Hey, David. Thanks for having me. Matt,</b>

<b>that's a long job title in a nutshell. You've been</b>

<b>around for a while and you've got fingers in</b>

<b>lots of pies. Is that the summary? I'd add market</b>

<b>structure geek to the title as well. Okay. Yeah.</b>

<b>We're very happy to have geeks and nerds in job</b>

<b>titles here on the show. Thank you both for</b>

<b>joining us today. So as we touched on in the</b>

<b>setup there a moment ago, there certainly</b>

<b>is pressure on the buy side to reduce their</b>

<b>counterparty panels. Owen, come to you first</b>

<b>of all on this. What are some of the reasons</b>

<b>behind this and what practically does it mean?</b>

<b>What kind of challenges does that present you with?</b>

<b>Well, there is fee compression in the</b>

<b>industry generally, which has led to cost cutting</b>

<b>in our peers. Broker panels in themselves isn't a huge cost center, but there is</b>

<b>significant resources needed in terms of</b>

<b>regulatory oversight and just setting up and</b>

<b>maintaining lines. So the trajectory is</b>

<b>definitely to reduce, not increase the panels. Now, we also</b>

<b>have to bear in mind our ability to service</b>

<b>our clients. So we don't want that liquidity</b>

<b>to be applied to our clients to decrease as</b>

<b>a result of that. So we do use other means to</b>

<b>provide liquidity such as platforms. If we</b>

<b>remove lines from account to party, we still</b>

<b>usually have the option to trade with them, but</b>

<b>via an e-platform such as Market Access or TradeWeb,</b>

<b>which in theory doesn't decrease our ability to provide liquidity.</b>

<b>Yeah. We'll certainly be coming on to platforms</b>

<b>later on today. Matt, from your side, are there</b>

<b>any similar pressures that the sell side is</b>

<b>facing at the moment in terms of how things</b>

<b>are changing, how things are evolving in this</b>

<b>area? Yeah, definitely. I'd agree with Owen's</b>

<b>comments. When you look at the sell side, there are cost constraints and pressures,</b>

<b>cost of income questions are continually asked across the sell side environment.</b>

<b>You've got to look at the maintenance and the</b>

<b>regulatory costs for onboarding and continue to</b>

<b>maintain. Even if you're doing it through</b>

<b>platform, you are onboarding that client as a counterparty.</b>

<b>It might be more riskless if it's going</b>

<b>through a clearinghouse, if you're talking about OTC</b>

<b>derivatives, but there is still an onboarding</b>

<b>requirement in the fixed income world with a</b>

<b>direct counterparty. There are high costs to</b>

<b>that in terms of the AML and KYC. When you're</b>

<b>onboarding that relationship with that cost,</b>

<b>that cost also, we are in a financial markets</b>

<b>environment. We need to make profits from that</b>

<b>as well. That is a consideration, I think, on both</b>

<b>sides. Owen, how are panels changing then? We're talking about a change in context,</b>

<b>changing market, changing environment in</b>

<b>which you guys are operating. How are your panels</b>

<b>changing? Maybe we said it up earlier,</b>

<b>different types of liquidity providers. What does that</b>

<b>ultimately mean for WalletShare? Well, I suppose</b>

<b>the new entrants would be the algorithm traders,</b>

<b>such as Jane Street and Flow traders.</b>

<b>Typically, they are E-trading only. That's become an</b>

<b>increasingly larger slice of our business.</b>

<b>There's numerous reasons for that. I'd say</b>

<b>regulation is pushing us in that direction</b>

<b>generally. They often see our flow. Even if</b>

<b>they don't win our flow on those platforms,</b>

<b>they do provide valuable information. They're very</b>

<b>quick to price. For me, they're a valuable</b>

<b>addition to our panels. I think I agree with</b>

<b>that. If you look at the growth of what you've</b>

<b>seen in terms of the proprietary trading firms</b>

<b>and the liquidity they're providing for the</b>

<b>market, you've seen huge growth across a number</b>

<b>of the product types. I think, critically, there's</b>

<b>a lot of value in the liquidity that they provide.</b>

<b>But, critically, there's a concede</b>

<b>consideration, as Owen said, is a lot of this is electronic</b>

<b>only. Now, I also understand that these guys</b>

<b>are also providing OTC liquidity. But, critically,</b>

<b>they do not have the same balance sheets as</b>

<b>traditional banks. When you're trying to shift</b>

<b>significant risk, there needs to be a</b>

<b>consideration in terms of what's coming. It's not to say that</b>

<b>they can't, because if you look at the size of</b>

<b>some portfolio trades that go through in credit,</b>

<b>they are huge in notional value, but not necessarily in terms of risk that's being</b>

<b>done in terms of the whole portfolio. But there's</b>

<b>a consideration there that needs to be looked at.</b>

<b>But, critically, Owen always has best ex at the</b>

<b>back of his mind in terms of how he's thinking</b>

<b>about this on a trade, but also on an</b>

<b>aggregate level. Yeah, that's true. So, we wouldn't be</b>

<b>showing them large risk transfer trade. We</b>

<b>would do the banks. But, certainly, on the smaller</b>

<b>platform trades, they are very competitive.</b>

<b>And, Owen, the space in which you operate,</b>

<b>correct me if I'm wrong here, but</b>

<b>particularly in emerging markets, are you finding that</b>

<b>landscape changing as well in terms of the</b>

<b>variety and the number of maybe mainstream,</b>

<b>but also some more of the niche players there that you might want to engage with?</b>

<b>Yeah, we absolutely need to keep our doors open</b>

<b>to these guys because of the nature of what we're</b>

<b>trading. So, some markets aren't as well covered</b>

<b>by the banks, in which case there is that local</b>

<b>specialized knowledge from the regional</b>

<b>players, say, that we need to be able to tap into. So,</b>

<b>we can't just stick to trading with the top</b>

<b>tier bull's bracket banks. We need to be able to</b>

<b>have lines of these guys receive color and</b>

<b>relevant access from them, which is valuable</b>

<b>to our clients. Yeah, yeah. I completely agree</b>

<b>with that because when you look at it, it goes</b>

<b>back to variety and the different products</b>

<b>that you're trading. There's a lot of time</b>

<b>where you can get standard coverage from</b>

<b>the banks, but there's times when you need,</b>

<b>if you're trading local currency, you need</b>

<b>to have that local environment where you're</b>

<b>not going to be putting a huge amount of flow,</b>

<b>but you need to be able to access that liquidity.</b>

<b>And it's critical to be able to have that</b>

<b>panel. That's true. Yeah, particularly in frontier</b>

<b>markets, most of the onshore liquidity comes</b>

<b>from pension funds and the agency brokers in those</b>

<b>markets tend to have maybe worked for the</b>

<b>pension funds or at least have a good relationship with</b>

<b>them. So, that's kind of vital to be able to</b>

<b>move risk in those markets to have that source of</b>

<b>liquidity. Does that therefore mean, I mean,</b>

<b>I don't know how many different providers that</b>

<b>you have on your panel, but does that mean that</b>

<b>you, if you are operating in those markets and</b>

<b>you do need to look to those niche players for</b>

<b>particular value, does that mean that you would</b>

<b>necessarily need to have a longer panel, a</b>

<b>larger panel in order to satiate all of those</b>

<b>different needs? And does that prevent you</b>

<b>present you with a different challenge then?</b>

<b>Not necessarily. I think there's enough room,</b>

<b>usually on a panel for both. It kind of just</b>

<b>tends to grow organically. So, you kind of</b>

<b>need to be careful about adding brokers, you know,</b>

<b>infinitely. Typically at the moment, I think we</b>

<b>probably have about 50 lines in place of fixed</b>

<b>income. And we don't like that could probably be</b>

<b>reduced. And typically, if you want to open a new</b>

<b>line, we'll need to close an existing one.</b>

<b>Right, no room at the inn. Matt, is that common</b>

<b>from your view on the other side as well, that</b>

<b>every now and then there does come this cull when</b>

<b>providers just get right, lopped off and it's</b>

<b>time for you to try and re-nurture that relationship</b>

<b>or go looking elsewhere? I think there's</b>

<b>different ways of looking at this. And I'm trying not to</b>

<b>sort of just look at it as a standard bulge</b>

<b>bracket view. As a bulge bracket, you know,</b>

<b>that there's going to be different</b>

<b>variations in terms of when you are building product</b>

<b>specialism and liquidity provision and areas</b>

<b>where you might be slightly weaker because you cannot</b>

<b>do everything and be amazing at everything.</b>

<b>It's just that you can't. The environment,</b>

<b>the capital requirements around that is just</b>

<b>impossible. So, there are points in time where,</b>

<b>you know, as a bulge bracket, you might not be</b>

<b>on the list or you might not necessarily be there.</b>

<b>And it's also about having a frank and</b>

<b>open discussion with your clients to say, yep,</b>

<b>we're not there at the moment. This is where our</b>

<b>focus is. This is how we can help you. This is how</b>

<b>we can structure our arrangement. I think,</b>

<b>you know, when you get out of the top seven,</b>

<b>you know, bulge bracket firms, and correct me if</b>

<b>I'm wrong here, but that's where you start to see</b>

<b>a more difficult conversation because, you know,</b>

<b>you're going to link a lot of your flow towards</b>

<b>those top seven. And then when you're in that</b>

<b>awkward bucket, what are you actually doing? So,</b>

<b>there's kind of a bit of a push there in</b>

<b>terms of that rankings and where that evolves.</b>

<b>Yeah, it's kind of an awkward position, that kind</b>

<b>of mid tier because you are competing with the top</b>

<b>tier, you're using balance sheet, but then there</b>

<b>is a cost to that. And then the lower tier would be</b>

<b>an agency model where there's no risk involved. So,</b>

<b>the kind of mid tier guys, I think, really need to</b>

<b>specialise and not try to do everything like</b>

<b>the top tier guys might do. Let's come on to the</b>

<b>relationship nurturing part of that in a moment.</b>

<b>Owen, you can't manage something until you measure</b>

<b>it. How are you measuring, quantifying</b>

<b>counterparty relationships and making sure that you've got</b>

<b>consistency across those metrics,</b>

<b>particularly when you're working across developed and the</b>

<b>emerging markets that you've got more than a</b>

<b>few toes in? Yeah, I mean, the most important</b>

<b>statistic would be just volume of trading we're</b>

<b>doing. And that's certainly what the banks are</b>

<b>most interested in. We have a biannual review</b>

<b>process where we go through all the asset classes</b>

<b>for the tier one banks. And within the asset</b>

<b>class, they will drill down into where you're</b>

<b>seeing flow, where you're not seeing flow</b>

<b>versus your peers. So, we do provide quite detailed</b>

<b>information. We're happy to do that. It's a</b>

<b>mutually beneficial relationship. There is,</b>

<b>I think, from my point of view, the soft skills</b>

<b>from the salesperson is important as well. I mean,</b>

<b>there's a lot of noise in the market with</b>

<b>Bloomberg IB, emails. It's very difficult sometimes to</b>

<b>filter that into usable information. So, we</b>

<b>rely on our sales to then provide us relevant</b>

<b>colouring access on bonds that they know we're</b>

<b>involved in. And also to, in essence, work for</b>

<b>us as a client as much as they do for their own</b>

<b>desks, because we're stakeholders in that process</b>

<b>as well. So, we need them to be able to push</b>

<b>their traders to give us the pricing we need</b>

<b>to maintain those volumes. Matt, when we spoke in the summer on this at the CMX</b>

<b>event, you weren't on this panel, but something</b>

<b>we did touch briefly on in that session was about</b>

<b>dealer reviews. Owen, you shared some</b>

<b>thoughts on that. But Matt, I'm keen to understand,</b>

<b>you know, from your side of the dealer reviews,</b>

<b>when they don't work, when maybe they don't feel</b>

<b>as though they're as constructive as they might</b>

<b>be, when there's more value that could be got from</b>

<b>them, if only this thing were to happen, what</b>

<b>would this thing be for you? I think they're</b>

<b>having sat on quite a few dealer reviews</b>

<b>in my time across a number of asset classes.</b>

<b>I think the key thing is actually interaction.</b>

<b>You can have some information-rich dealer reviews,</b>

<b>I think critically and going to one of Owen's</b>

<b>points, information about what your trading flows</b>

<b>are, but critically, not just about trading</b>

<b>notional, but trading risk. And really from a</b>

<b>client's perspective, being able to go, what have</b>

<b>we done in risk? What have you done? Not without</b>

<b>trying to give out any sort of secret source or</b>

<b>any proprietary information, but to really understand</b>

<b>what's happening, because when you look at how</b>

<b>people are building their metrics at the moment,</b>

<b>it's generally off all the platform</b>

<b>information. Now, if we take a look at sort of like OTC</b>

<b>derivatives as an example, one thing that you</b>

<b>could find on platform where you could say you're doing</b>

<b>such a high notional volume is actually</b>

<b>compression trades, which are coming through and being put</b>

<b>through from the buy side. Now, these are</b>

<b>technically riskless. All they're doing is trying to optimize</b>

<b>the portfolio and to be able to manage that</b>

<b>accordingly. And there's no risk going through</b>

<b>in the market, but they have exceptionally high</b>

<b>notional value. Now, to me, that's a way of sort</b>

<b>of spoofing your stats, because I'm not really</b>

<b>doing any risk. I'm doing a trade that's not really</b>

<b>that much value to you or the market, but</b>

<b>aren't I looking amazing in the market share stats.</b>

<b>And critically to me, I think there's</b>

<b>information like that, which should be stripped out.</b>

<b>It's not relevant, right? Because as we</b>

<b>said all along, it's about that partnership,</b>

<b>that relevance in what's happening. I think also the other thing is the sell side.</b>

<b>When you have these dealer reviews, you go</b>

<b>into the room and you have your notepad open,</b>

<b>you know, scribbling down all the feedback.</b>

<b>I think also there needs to be a feedback,</b>

<b>an engagement with the buy sides because it's a</b>

<b>partnership. And sometimes it's having some of</b>

<b>those awkward conversations and also having the</b>

<b>right data. So some of the data I think we see in</b>

<b>the industry at the moment is really, really high</b>

<b>level, sometimes obsolete, sometimes out of date,</b>

<b>quite a lot of the time. And so I think where</b>

<b>we are in market structure, we should have a more</b>

<b>detailed review. We should be looking at E-Trading,</b>

<b>non-E-Trading OTC. Everyone's looking at E-Trading</b>

<b>stats, but actually we should look at OTC risk</b>

<b>and what's being done there. That's where everyone</b>

<b>wants to be able to win the trades as well. And</b>

<b>we should also be looking at statistics around,</b>

<b>okay, what percentage of my flow am I doing</b>

<b>through automated means? What percentages am</b>

<b>I actually leveraging different providers, you</b>

<b>know, and where does this come? Because if we</b>

<b>have that data in the right way, we can also have</b>

<b>a good market structure debate to look at what's</b>

<b>going to evolve in the right way for the end</b>

<b>investor. Well, seems to be very, very sensible</b>

<b>there. Partnerships, having the right data to</b>

<b>hand, making sure it's a two-way conversation</b>

<b>rather than just a one-way street. Owen,</b>

<b>anything to add to that to make sure that the dealer</b>

<b>reviews are as constructive, valuable as possible?</b>

<b>I would just add that if an issue is coming up in</b>

<b>a dealer review, it's probably too late. You need</b>

<b>to be having those conversations as they happen.</b>

<b>And that's something that we strive to do for</b>

<b>our important relationships. We essentially want to</b>

<b>nip any issues in the bud before they become</b>

<b>a block to trading and providing liquidity. So</b>

<b>it's really about maintaining the relationship on</b>

<b>an ongoing basis, sort of waiting to review to raise</b>

<b>issues. 100% agree. And it's like those</b>

<b>day-to-day issues they should be dealt with. And if you've</b>

<b>got a good sales guys, they're on with it. They're</b>

<b>trying to deal with it and actually sort that out.</b>

<b>And I think the dealer review is a lot more</b>

<b>thematic in terms of the relationship and how</b>

<b>you're progressing and how it needs to evolve</b>

<b>with quality to feedback, I think, on both sides.</b>

<b>To your point, David, I think it sounds really sensible and to look at the data,</b>

<b>but a lot of people are just trying to base</b>

<b>their information off electronic trading information</b>

<b>data and not including OTC information in it,</b>

<b>because that's not what I've got to hand and I</b>

<b>haven't got that data in a nice, easy formatted</b>

<b>way. And if we look at it, and as we've discussed</b>

<b>already, all the OTC, all the big risk trades,</b>

<b>they're done OTC. And these are the ones that we</b>

<b>need to be focusing on. So my personal view,</b>

<b>with my fix hat on, we need to be getting those OTC</b>

<b>data standards up to scratch. Just continuing</b>

<b>on the line of the relationships then, Owen,</b>

<b>like friendship groups, they say you have</b>

<b>friends for a season, friends for a reason,</b>

<b>and friends for life. Is that similar in your relationships with counterparties as</b>

<b>to you've got particular counterparties whose</b>

<b>relationships you nurture for the good times and</b>

<b>those maybe for the bad times? Yeah, absolutely.</b>

<b>And there's some relationships that, if you look</b>

<b>at it from a company point of view, they're much</b>

<b>more important than just the trading volumes. So</b>

<b>say if we see a tier one bank slip a bit in</b>

<b>our rankings, I think we're both incentivised to</b>

<b>try to get those numbers back up to where they</b>

<b>should be, because there's more than just that</b>

<b>relationship, the trading relationship at</b>

<b>stake. So to answer your question, yes. We do</b>

<b>try to nurture the relationship as much as we</b>

<b>can. And Matt, from your side, obviously, in times</b>

<b>past and so on, being on the receiving end of</b>

<b>those relationships, you understand where you are,</b>

<b>maybe in terms of that life or just for this particular moment in their journey?</b>

<b>You do. I think the key thing in terms of, as</b>

<b>a bold bracket, Salside Firm, you have so many</b>

<b>different types of counterparties. Particularly,</b>

<b>you just call out, look at the difference between</b>

<b>real money and hedge funds. And you can look at</b>

<b>how the profitability of that business can really</b>

<b>change and adjust. Understanding where you are</b>

<b>specifically with that business and understanding</b>

<b>what you've got, I think there's a real gap</b>

<b>there in terms of the quality of information,</b>

<b>as I said previously. And I think that that</b>

<b>could improve. I think the receiving end, yes,</b>

<b>things are cyclical. Yes, you go through, in</b>

<b>terms of all banks, go through good times or</b>

<b>times when you have innovation and evolution,</b>

<b>and you're rebuilding a platform and bringing,</b>

<b>say, for example, a new electronic platform in a</b>

<b>particular asset class, you might go through a dip.</b>

<b>But the key thing is continuing to have that</b>

<b>relationship, continuing to have that conversation,</b>

<b>trying to provide value ads away from</b>

<b>that, such as market structure content, maybe.</b>

<b>But there's a lot of different things that</b>

<b>need to come in. And I think it's conversation,</b>

<b>David, which keeps things flowing. Yeah, just to add to that, I would say,</b>

<b>trade or turnover on the sell side is probably a</b>

<b>bit of a risk on these desks. So it does happen</b>

<b>sometimes more often than not. But I think to</b>

<b>manage that, you just need to be open about what's</b>

<b>happening, as in from a bank's point of view with</b>

<b>your clients, how we're going to maintain liquidity,</b>

<b>who's stepping into that seed, and just try</b>

<b>to be as open and honest about it as you can.</b>

<b>And the same thing happens on the buy side as</b>

<b>well. So there is asset inflows and outflows,</b>

<b>and people go through different times. But</b>

<b>it is a relationship environment. Personally,</b>

<b>I've always strongly believed that the industry</b>

<b>is a family, in a sense. And if you behave in the</b>

<b>right way and continue to communicate and work</b>

<b>with people, the family's there for you, and they'll</b>

<b>work through it. But critically, behavior and</b>

<b>engagement is important to that, to make sure you</b>

<b>establish that relationship and get them</b>

<b>maintainer. Oh, the family thing. I like that. Let's talk</b>

<b>about the problem middle child in that case.</b>

<b>What incentives, Owen, do you provide to the middle</b>

<b>children, the mid-sized players to encourage</b>

<b>them to offer you flow, when they might not be your</b>

<b>favorite child, not necessarily part of your</b>

<b>top five in your panel? Yeah, I mean, it can be a</b>

<b>tricky position to be in because we tend to</b>

<b>stick to top tier in our large risk transfer</b>

<b>type trades. And there's a few reasons for that.</b>

<b>And probably the most important one being we want</b>

<b>to be relevant to them. And we want to have</b>

<b>leverage over them in our relationships, and we</b>

<b>don't want to spread our dealer wallet too thin.</b>

<b>So it can be tricky to break into that. And what</b>

<b>I usually say is, you know, highlight to us if</b>

<b>you're doing a significant amount of flow in any</b>

<b>particular market, because that definitely is a</b>

<b>reason for us to trade with you, because we want</b>

<b>who we trade with to be in the flow, so to speak.</b>

<b>So we want them to have an outlet to recycle our</b>

<b>risk. So that's very important. And the other</b>

<b>thing we would look at would be our E-trading stats. So</b>

<b>if we see them winning a significant amount of</b>

<b>volume there, that's also a reason for us to go</b>

<b>to them on the larger tickets, which is really</b>

<b>the ones that they want to see, because that's what</b>

<b>they essentially make money on. I think this</b>

<b>is the interesting thing as well, right? Because</b>

<b>it's not a closed family. I want to be really</b>

<b>clear in that, because it's not a closed family,</b>

<b>because you can see what the likes of the</b>

<b>proprietary trading firms, as we discussed</b>

<b>at the beginning of this podcast, are growing</b>

<b>in market share. And some of these guys are quite</b>

<b>regularly in the top five as counterparties in</b>

<b>terms of volumes with people across the street.</b>

<b>And so it's not closed, and it's not just completely shut off to the banks,</b>

<b>by the banks. This is open, and I think it is really, really important.</b>

<b>I think there's going to be an interesting point to your-- the point you just made,</b>

<b>oh, and around E-stats. Because if you say, if</b>

<b>you look at these prop firms, and you look at the</b>

<b>amount that they're growing, the amount that</b>

<b>they're doing on venue, if you then look at all</b>

<b>your E-stats, do you then have a fragmentation of</b>

<b>the market in terms of, I need the banks for the</b>

<b>big risk? I'm now starting to fragment my</b>

<b>electronic flow. Do we start to have a fracture</b>

<b>in that relationship of, if you do well on my</b>

<b>E, I'll let you see my big stuff? And I think</b>

<b>this is where I think it could be quite challenging.</b>

<b>Yeah, that's true. I think you can probably</b>

<b>split E-trading into two buckets. The kind of</b>

<b>liquid stuff that trades you're not concerned at</b>

<b>all about liquidity. So the way we would approach</b>

<b>that would be we automate as much of that as we</b>

<b>can. And I think the approach on the sell side</b>

<b>is the same. And then I guess you have the</b>

<b>mid-size tickets, which could be done, a platform</b>

<b>could be done voice, in which case you don't want</b>

<b>to blast those to market. You want to tailor who</b>

<b>you're sending it to. And that may be the</b>

<b>mid-player, it just may not be on that list. So</b>

<b>they want to be seeing that flow either by platform or by voice. And if I'm, say,</b>

<b>unsure about who's best or who should be included</b>

<b>in that market, that's a good measure for me to see</b>

<b>who should be there, who's winning those type of trades.</b>

<b>I completely agree. And I think when you start</b>

<b>to look at that, that's when you start having a</b>

<b>hybrid workflow model. It's about</b>

<b>understanding those flows, putting them together as a wider</b>

<b>view and having that visibility. It's not just</b>

<b>about trying to think about no touch and high</b>

<b>touches. This is all flows work together in</b>

<b>the central dealing desk from the buy side,</b>

<b>really providing value to the asset manager as a whole.</b>

<b>Yeah, because I personally want to be freed up</b>

<b>to add value on those kind of trades. I don't want</b>

<b>to spend all my time just clicking buttons on</b>

<b>platforms because it's really not the best use</b>

<b>of my time. So we've led very well in that case</b>

<b>on to E-Trading. And you've already touched on it</b>

<b>there about the types of trades and how</b>

<b>the engagement between buy and sell sides has</b>

<b>changed depending upon whether it's the smaller</b>

<b>trades, mid or the large. Is there anything that</b>

<b>we need to watch out for in this evolution of how</b>

<b>we trade with regards to the relationships though,</b>

<b>because you are having less contact points than</b>

<b>you might once have done. I mean, you've seen a</b>

<b>lot of changes in your time. The same as you</b>

<b>have, Matt. So are there any things that we need to be</b>

<b>conscious of to watch out for to make sure that</b>

<b>along with the benefits, along with the additional</b>

<b>value that these platforms provide, we don't</b>

<b>suddenly find out that we've lost something</b>

<b>else that's valuable that's important too.</b>

<b>From my point of view, you're right. And it does</b>

<b>take away some interaction with the banks in</b>

<b>terms of these tickets. And in terms of the actual</b>

<b>number of trades you do, they're obviously very</b>

<b>large, it's most of the trade you do. But in terms</b>

<b>of volume there, it's quite low because our</b>

<b>larger tickets will be much bigger. So there is a risk</b>

<b>to the relationship in some regard there that</b>

<b>you're not speaking to your counter parties as much as</b>

<b>maybe you would have before the trading platforms</b>

<b>were as proliferate as they are. However, there's</b>

<b>really no other way to do it. With the amount</b>

<b>of flow that's going through the market now,</b>

<b>it's the only option. I think it's only going to</b>

<b>go into increase. So there is a challenge there.</b>

<b>Probably best addressed by sales, like</b>

<b>salespeople, just to keep in contact, keep the relationship</b>

<b>open. And I don't see it causing too much</b>

<b>of an issue. When you look at this, I think,</b>

<b>I was talking to my son as he was going to his</b>

<b>new school this week. And he said, it's human nature</b>

<b>to push back against change, because change is,</b>

<b>you don't know about it. You don't know how this</b>

<b>is evolving. And it could create problems.</b>

<b>And when you look at this, that is the initial</b>

<b>reaction, David. When you look at a number of</b>

<b>the panels that have been asked, that's the initial</b>

<b>question. But fundamentally, if we go through</b>

<b>the debate we've just had, and you go back to the</b>

<b>point of what are the sell side doing, the sell</b>

<b>side for Owen, when we're coming in and stepping</b>

<b>up and taking that risk when he really needs it,</b>

<b>and to be able to manage that quality, which are</b>

<b>the trades that the sell side won't win. So that</b>

<b>means you've got to have voice sales. Voice sales</b>

<b>in no shape or form is ever dead, because that</b>

<b>is the relationship. You can't just leave the risk</b>

<b>models to run massive high risk trades with</b>

<b>an AI engine behind it. It's not going to work.</b>

<b>The critical point to that then is actually,</b>

<b>I think this creates diversity. You still have</b>

<b>the voice salesperson, you still have that person</b>

<b>generating the acts, being the advocate internally</b>

<b>for the client as well. But then also, you have</b>

<b>e-sales people now coming through. You have market</b>

<b>structure people coming in, providing that</b>

<b>value, providing that engagement, maybe providing that</b>

<b>color that might not have seen before. Maybe</b>

<b>agitating the conversation around the question of,</b>

<b>is the acts quality seeing the right thing?</b>

<b>Because now you're getting a lot of electronic</b>

<b>access. And is electronic the right term to use</b>

<b>in fixed income? Because when you look at fixed</b>

<b>income electronic trading, that means we need on</b>

<b>venue. Well, to me, that's nonsense. Electronic</b>

<b>is everything, right? Everything's touched by an</b>

<b>electronic trade. So we should look at revitalizing</b>

<b>that term and moving on. So I think there's more</b>

<b>opportunities, more touch points, but maybe more</b>

<b>rationalization of the traditional engagement</b>

<b>that you see. There's a lot to break part purely on</b>

<b>the electronic trading piece there. I'm not sure</b>

<b>we're going to have time to take that apart and</b>

<b>to fish in that pond any more today because we are</b>

<b>out of time. But listen, Matt, Owen, thank you so</b>

<b>much for chatting us through that and helping</b>

<b>us to understand the relationships, helping us to</b>

<b>understand really how to get the most value</b>

<b>in these relationships right now as things are</b>

<b>changing. Thank you both very much, indeed. Thank</b>

<b>you very much for having me. Thanks for having me.</b>

<b>And a reminder that you can catch up with our</b>

<b>previous episodes here on CMXtra on topics such</b>

<b>as AI in trading, T plus one, that's that's been</b>

<b>and gone. Now, leadership and culture, you can find</b>

<b>those and more wherever you found this episode on</b>

<b>thecmx.com that's the hyphen cmx.com. And of course,</b>

<b>all the normal places where you'll find your</b>

<b>podcasts. If you like what you heard today,</b>

<b>then share it with your colleagues, leave us</b>

<b>some feedback. The cmx page on LinkedIn is a great</b>

<b>place for that. And well, while you're</b>

<b>there, perhaps tell us what you'd like us to cover</b>

<b>in the future. And speaking of the future, at the</b>

<b>top of the show, I promised some intel on the next</b>

<b>in person cmx event. And we can reveal that.</b>

<b>Well, cmx will be back at the Woolwich works in London</b>

<b>once again, this time on Thursday, July the third</b>

<b>2025. So put the date in your diary, get practicing</b>

<b>on the scale x trick and the giant Jenga. And</b>

<b>trust me, July will be here before you know it. But</b>

<b>that's all for now from me, David and from all</b>

<b>the cmx production team. Thanks for joining us.</b>

<b>And until next time, bye bye.</b>