Horizon Software has completed a major step in globalising its automated trading platform as Vontobel has acquired its services to power the bank's retail and execution transaction flows and to develop proprietary trading strategies.
The Horizon Platform for Automated Trading (HPAT) provides capacity to engineer sophisticated algorithmic strategies and flexibility when executing both agency and proprietary transactions. "Vontobel has some very impressive software designed in-house to serve its structured products business, its private banking operation and in terms of agency trading, so the decision to onboard Horizon is even more meaningful," said Sylvain Thieullent (pictured), chief executive at Horizon Software.
The platform will also help Vontobel to address 'constant regulatory changes', such as demonstrating best execution under Mifid 2, Horizon noted.
With Mifid 2, there are few constraints regarding flagging, algo orders, timestamps of the orders, capability to trace the workflow of the orders and consistent reporting, according to Thieullent. HPAT is compliant with all requirements, he said.
The platform's data collection and reporting capacity under the upcoming regulatory framework will allow businesses to use this new information to construct a more complete market perspective, according to Thieullent. "We are trying to look at regulation changes as not just a burden where you need to gather all type of data, but also as an opportunity for the business to leverage this information in an increasingly dynamic market," he said.
The Mifid 2 will bring a lot of opportunities and Horizon is working with banks on different initiatives like risk aggregation, said Thieullent. He also noted that the company is exploring various sectors and markets that are lacking a mature digital execution platform. "We are seeing several trends in commodities, where there is more and more demand for electronisation, while we also see a lot of room for automation in ETFs," he said. Horizon has also identified favourable trends in some emerging markets, including the Middle East and Eastern Europe, according to Thieullent.
Horizon beat as many as 15 other technology vendors for the contract. Vontobel is one of the biggest private banking institutions globally, with some CHF187bn (US$187bn) under management. The Swiss bank already had a sophisticated and highly-automated trading platform before the acquisition of HPAT, but the bank's 'commitment to active management of wealth and increasing demands on performance, along with changing requirements, led the bank to re-evaluate parts of its infrastructure', stated Horizon in a press release.
The announcement of the partnership with Vontobel follows the deal that Horizon struck last month with Beijing-based securities house Dongxing, which switched to HPAT for its market-making activities and proprietary and algo trading desks. "There is strong demand for back-office automation, both for managing client portfolios and prop trading," said Dengli Wang, head of proprietary trading at Dongxing. "In terms of tech vendors, China is significantly lacking as compared with mature markets."
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