Spire Europe, the London arm of US proprietary trading group Tower Research Capital, will appoint Simon Dove as head of liquidity management from January 2017, a new role for the firm.
He will be specifically responsible for helping to secure liquidity provision agreements between Spire and third parties, including investment banks. It is a departure for the firm, which trades directly on exchanges and other trading venues, using its own capital and highly quantitative models.
Spire, which recently celebrated its 10th anniversary and employs more than 130 people, is a big player on European equities markets. The firm is regularly ranked as one of the top 10 participants on Nasdaq’s European exchanges, one of the few to disclose member activity, but its trading strategies in the region will be impacted by the EU’s updated Markets in Financial Instruments Directive.
Coming into force in 2018, Mifid II will constrain two venues popular among HFTs: broker crossing networks run by the large, global investment banks, and dark pools regulated as multilateral trading facilities. The former will be banned under Mifid II, while the latter will be capped so as to encourage more lit trading.
New opportunities are expected to open up for HFTs as a result, with activity shifting instead to systematic internalisers, which will become recognised trading venues under Mifid II and are designed to capture trades that firms complete using their own capital. Any firm that registers as an SI in an instrument must post continuous quotes in that name up to a standard market size – helping to bring an element of pre-trade transparency to market-making activity conducted off-exchange.
That onerous quoting obligation has raised the prospect that many electronic trading firms will become SIs, and provide liquidity to banks on a bilateral basis. Spire intends to do so.
At Spire, Dove will report to Spire’s CEO Alan McGroarty, a former Citadel and Goldman Sachs executive, who told FN: “With the many opportunities presented by both Mifid II and the shift to non-bank liquidity provision across asset classes, it’s fantastic to have Simon on board with the breadth of experience and market knowledge he brings.”
Dove, twice an FN Rising Star, was most recently managing director at rival London prop firm, Sun Trading International,. Before that he spent more than eight years at the London Stock Exchange.