Jonathan Clark is CEO of Luminex Trading & Analytics.
What does 2019 have in store regarding market-structure changes?
Continuing the trend of recent years, we expect that the number of ATS venues will continue to shrink. The barriers to entry, regulatory hurdles, and reputational risk (if you’re not fully committed to doing it right) are far too high for the number of players to remain the same.
Those broker-dealers that are tertiary presences in the space likely will leave, and those who might otherwise be interested in starting an ATS probably will not do so.
What does this mean for off-exchange trading?
Although more competition generally benefits the consumer (or the investor, in this case), the pendulum probably has swung too far toward fragmentation.
It’s also not the worst thing in the world if the remaining players view their ATS as a core business to their firm and not an afterthought created because seemingly everyone else is in the space.
What will be the skill sets most in demand this year?
Trading desks and portfolio management teams will continue to require individuals that can collect, parse, and analyze data, and will prioritize the hiring of people with those skills.
As the range of available data continues to grow and diversify, it is only becoming a more integral part of the investment process, from stock selection to trading.
The c-suite and hiring managers know that quality output from quants, data scientists, and the like will undoubtedly drive better decisions, which should, in turn, generate – or at least protect – alpha. However, data also drives decisions across an enterprise – from the back-office to sales/marketing to compliance. The gold rush is underway for people with these skills, regardless of the business line or department.