Electronic Platforms Slowly Absorb Traditional Trading Desks

What I was thinking 5 years ago when I was working at Credit Agricole is slowly happening. In a move reflecting the growing dominance of computer-driven trading on the stock market, Credit Suisse Group AG promoted the head of its U.S. electronic-trading desk, Dan Mathisson, to oversee the bank’s traditional block-trading business as well.

The developments, described in an internal memorandum that went out Tuesday and was confirmed by a bank spokeswoman, show how big banks’ institutional clients such as hedge funds and mutual funds are increasingly trading via sophisticated computer algorithms, and less through human interaction.

Mathisson will continue to supervise Credit Suisse’s electronic-trading business, called Advanced Execution Services, a highly profitable unit that he helped start a decade ago. As part of that business, he oversees Crossfinder, one the biggest so-called “dark pools” in the U.S.

Such pools are private trading venues that cater to institutional clients wanting to buy and sell stocks anonymously, and avoid attracting attention to their orders that could move prices up or down to their disadvantage.

“Effective immediately, we are combining the U.S. High-Touch and Low-Touch execution businesses into a single execution and trading group,” Credit Suisse told employees in a memo Tuesday from Steve Garnett and Mike Paliotta, the bank’s co-heads of equities for the Americas.

In his new role, Mathisson becomes head of U.S. cash execution and trading.

The “high-touch” business includes the trading floor that dominated in past years, where equities sales employees take orders from clients, often hollering across the floor about blocks of stocks to buy or sell. The “low-touch” business matches buy and sell orders electronically, doing large volumes of trades at generally lower costs per trade.

A separate memo from Garnett and Paliotta said that Matt DeSalvo, who as head of Americas equities sales trading and cash trading oversaw the “high-touch” business, is leaving Credit Suisse to pursue other opportunities. DeSalvo couldn’t be reached, and a bank spokeswoman declined to comment beyond the memo.

Jenny Strasburg – Deal Journal

One thought on “Electronic Platforms Slowly Absorb Traditional Trading Desks

  1. Hi There Rlefranc,
    Speaking of which, With the information age in full swing, various industries are converting their operations to electronic platforms. As a result of government prompting and funding, the healthcare industry is involved in a major transition, converting medical records from paper to electronic format. This is a huge initiative, involving things like EMR integration and development of an HL7 interface that allows health information to be exchanged within a medical community.
    Keep up the good work

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