GlobalCustodian.com this week reported that Citi has selected Fidessa to deliver a workflow and trading platform for its global listed derivatives business.
Following the news, Jerome Kemp, global head of Listed Derivatives Sales & Clearing, reveals what the bank’s previous platform arrangements were for exchange-traded derivatives (ETD) and OTC clearing and why it chose to consolidate with Fidessa.
Fidessa will provide Citi with global order management and distributed low-latency execution platform along with BlueBox, Fidessa’s integrated algorithmic trading engine. Fidessa will also deliver next-generation risk management functionality, comprehensive market data and a global order routing service.
The outsourcing agreement follows a major push by Citi into the global listed derivatives space and the hiring of Kemp in January. He joined from J.P. Morgan, where he expanded the bank’s on-exchange futures and options business to include OTC derivatives and clearing. After joining Citi, Kemp himself lured several key people from his previous employer to help drive the bank’s listed derivatives business forward. A string of new appointments have been announced, notably including Conor Cunningham, who joined in March to assume the responsibility of the regional ETD business in Asia, and Antonio Reyes, who also joined in March to lead the ETD Electronic Execution Product development effort globally.
What arrangement did you have in place before outsourcing to Fidessa?
I joined in January to lead the futures and options business and to put the business onto the map globally. Through direct market access and electronic trading we can connect clients to a variety of geographies by providing a variety of venues. We had several different vendors providing this connectivity before. However, we found that the patchwork approach doesn’t provide the coherence and consistency needed to enable our clients to compete in the global marketplace.
What factors influenced the decision to outsource to one provider?
The question was, how do we harness technology to make the business more efficient? In terms of consistency, there were limitations on what a patchwork of vendors can provide. At the same time, we realized our strengths were being able to trade across multiple asset classes. We would be in a better position to grow that business with one coherent platform.
Why did you choose Fidessa?
We chose Fidessa for its global order management and distributed low-latency execution platform and for its sophisticated, integrated workflow capabilities that operate across multiple asset classes. We are in the process of transitioning onto Fidessa’s platform.
[The new platform will be implemented in a number of phases, commencing later this year, and will be integrated with Citi’s own proprietary internal back-office business systems.]
How will Fidessa’s platform help your business going forward?
The reach of Fidessas platform is extensive globally. Through this single platform we can manage order types, libraries of algorithms and VWAP execution, for example. The offering will include a very powerful order management system on a global basis. In terms of downstream connectivity, clients will use the same middle- and back-office technology for consistency, and they are fed order processing on an STP basis. This makes them more efficient. The platform will also help us to increase the number of clients using our derivatives services.
Janet Du Chenne