BTON Financial, a startup that is offering outsourced smart broker routing targeting mid-tier asset managers, has appointed the London Stock Exchange’s Brian Schwieger and Merrill Lynch’s Tony Walker as non-executive directors.
Schwieger and Walker have joined as advisors, helping BTON to promote its vision of offering SaaS-based, broker-neutral routing of buy-side orders to sell-side trading desks and execution systems. The big-name electronic trading hires – in what CEO Dan Shepherd indicates is the first of a series – lend credibility to BTON’s operating model, which seeks to help asset managers improve execution performance while reducing overhead cost.
Schwieger is the LSE’s global head of equities, with responsibility for equity markets in London and Milan, as well as co-head of ETF and fixed-income markets in London. He is also a non-executive director of the LSE’s MTS European fixed-income trading platform. He was previously a managing director at Bank of America Merrill Lynch with responsibility for the firm’s European electronic trading platform.
Walker also hails from Merrill Lynch, where he was managing director of EMEA EXecution Services, having started his career at Lehman Brothers electronic trading department. He is also a non-executive director of electronic liquidity provider Citadel Securities Europe.
According to Shepherd, BTON is seeking to reduce overhead while improving performance for mid-tier asset managers by offering a “broker-neutral smart broker router.” The hosted service is fully independent, and users are charged only a subscription fee whatever their level of usage.
The service, which has one contracted asset management client and others at advanced stages of contract negotiation, aims to level the playing field for smaller asset managers struggling to compete in the face of reduced and/or expensive access to research, and higher overhead costs as markets beyond equities shift to electronic trading.
Shepherd says clients can opt to fully outsource their trading operations to BTON or use a hybrid model, retaining high-touch operations for large-in-scale orders or esoteric financial products.
Shepherd, a veteran of low-latency connectivity specialist Algo-Span and the LSE’s TradEcho trade/transaction reporting service, says the BTON platform receives FIX-based order messages from clients’ portfolio management or trading systems (or BTON-provided GUI). The BTON rules engine then routes the order to the appropriate broker, according to best execution and regulatory considerations.
Shepherd reckons this approach can help smaller asset managers that are constrained by inadequate technology, rising compliance costs and profit margin compression. He says BTON helps these firms keep pace with their larger peers, while complying with MiFID II best execution rules, and trade and transaction reporting requirements. It also automates workflow processes, improving trading performance for the benefit of the end investor, he says.