CHALLENGES IN A FRAGMENTED WORLD THE INVESTOR PERSPECTIVE

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Donna Reed
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1 FONDMÆGLERSELSKABET A/S CHALLENGES IN A FRAGMENTED WORLD THE OR PERSPECTIVE KLAUS BENTIN SENIOR EQUITY TRADER ASSET MANAGEMENT

2 AGENDA Liquidity Transparency Settlement Cost 2

3 LIQUIDITY THE ROAD TO MONEY. EXCHANGES, MTF. 3

4 LIQUIDITY SIZE DOES MATTER.. VOLUME CONTRA LIQUIDITY! Less than 10 pct. of orders ends up as trades volume/size of trades HFT High Frequency Trading New products Long or Short holders 4

5 TRANSPARENCY BUT WHO WANTS TO LIVE IN A GLASSHOUSE? But then again what s there to hide?? PS! Please note the dark pool in front of the house!! 5

6 TRANSPARENCY... WITH A LITTLE BIT OF HELP FROM... DMA Direct Market Access SOR - Smart Order Routing Algorithms But were is the right volume and price to benchmark against?? 6

7 SETTLEMENT MiFID doesn t include settlement SSI / standard settlement instructions Cross border trades / time zone Short /warehousing / stock lending Pre match Know your client 7

8 COST WE ARE ALL HERE TO MAKE MONEY clearing Client Markets / Exchanges Ass. Man. Custodian Broker Bank 8

9 COST TCA trade cost analyse Pre- and post cost analyse But is that all? Stamps & Tax Cost of settlement Cost of errors 9

10 THE SIMPLE ONE... IN THE GOOD OLD DAYS!! Client Bank/Broker/Custodian Markets 10

11 ORDER-/TRADES-/CLEARING-CHAIN Clients Clients Adm. Clients Asset adm. Mannagement Clearing Custodians/banks. Broker/Bank Counterparty Broker/Bank Markets Exchanges/MTF 11

12 IN CONCLUSION One integrated tickertape Better knowledge of the influence of SOR/Algoes The need for easy settlement and clearing Know Your Client - Why How What Take a look at the Airline Industry! 12

13 DISCLAIMER This presentation material is made by ("Maj Invest"). The presentation material is solely made as information material. The presentation material is not an offer or a suggestion to buy or sell any security, foreign currency or financial instrument. The presentation material is not based on or customized to any investor s financial circumstances. The presentation material is not investment advisement and should not be seen as such. The presentation material presents only information in general about securities. The information in the presentation material cannot replace individual professional counseling. The presentation material is based on information from sources that Maj Invest finds reliable but Maj Invest has no responsibility in the accuracy of the information or for decisions made on the basis of the presentation material hereunder potential losses. Maj Invest and its parent company and employees of Maj Invest can hold, trade and execute orders for own book and on behalf of customers in securities, foreign currency and financial instruments mentioned in the presentation material. Maj Invest can be the investment advisor for customers mentioned in the presentation material e.g. Investeringsforeningen Maj Invest. Maj Invest has a co-operation agreement with Investeringsforeningen Maj Invest about the distribution of and information about Investeringsforeningen Maj Invest and Maj Invest is paid here for. Evaluations in the presentation material are based on estimates and assumptions. Investment in securities is associated with risks. Movements in the market in general and incidents linked to securities can impact movement in market prices which therefore can differ significantly from the in the presentation material anticipated. Past performance is not necessarily a guide to future performances. Estimates of future performance are based on assumptions that may not be realized. The presentation material is covered by the Law on copyright in Denmark. The presentation material is for the recipients own use and may not be distributed, photocopied or published to anyone without permission from Maj Invest except when necessary to persons within the same organization. 13

14 FONDMÆGLERSELSKABET Maj Invest A/S CONTACT Klaus Bentin, (+45) (+45) Fondsmæglerselskabet Maj Invest A/S Telefon:

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