Perspectives on Algorithmic and Electronic Trading in Canada: Integration. Opposition. Evolution. – Nov 2006
All interviews were conducted from April 17, 2006 to November 6, 2006.
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This is Forefactor`s first benchmark study of algorithmic and electronic trading in Canada. This research delivered a comprehensive, qualitative overview of the adoption of electronic trading systems and tools as well as related perspectives on the issues surrounding the implementation of these systems in Canada.
The research captured data through two avenues – in-depth telephone or in-person interviews with target respondents, and a self-administered questionnaire. The in-depth interviews explored participant experiences and perspectives on algorithmic trading within the Canadian capital markets context. The self-administered questionnaire was designed to deliver hard numbers on algorithmic trading as a proportion of total trades and related information on execution venues, algorithmic strategies used, and their impact on passive/active trading strategies, pricing etc. A total of eighty interviews were undertaken in this research from the following target segments:
- Thirty-four interviews were undertaken with portfolio managers and traders on the buy-side (sixteen traders, eight portfolio managers, nine combined trader/portfolio manager function) representing thirty-one firms (six hedge funds, seven pension funds, five mutual funds, and thirteen investment management firms) with an estimated $1.3 trillion CAD in Canadian assets under management (AUM).
- Twenty-six interviews were undertaken on the sell-side with individuals responsible for trading, sales or prime brokerage, representing twenty-four firms, and twenty-one out of the top twenty-five brokerages in Canada based on value traded as at October, 2006.
- Fourteen interviews were undertaken with twelve technology, alternative trading system (ATS) and exchange enterprises operating in Canada.
- Six interviews were undertaken with organizations responsible for national and provincial securities regulation and/or compliance.
Secondary data collection and analyses were completed using the Internet to review and summarize competitive intelligence found in press releases, news articles and on websites. Additionally, TSX Group trading data was incorporated. All secondary information is as at December 31, 2006.
