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EDHEC-Risk Executive Education

Execution and Trading on Equity Markets – The New Landscape: Overview

9 March, 2012 - Singapore

Providing a comprehensive understanding of today’s market structure, required to develop best execution strategies, optimise trading strategies, and understand regulatory issues, the course discusses the impact of algorithmic and high frequency trading strategies on market quality and the trading environment, and also reviews short selling.

Over the past two decades, regulation and technology have allowed for the development of competing venues for order execution. While traditional exchanges have modernised, low-latency venues, dark pools, and other non-traditional markets have emerged. These new venues often target specific clienteles, ranging from fast algorithmic traders to passive buy-side investors. The resulting market fragmentation and the opacity of some venues raises several important issues for market participants, market operators, and regulators. At the same time, these new developments can be value enhancing for traders and firms offering order execution services. A comprehensive understanding of today’s market structure is necessary to develop best execution strategies, to optimise trading strategies, and to put into context the regulatory agendas in the major financial markets; equipping participants with this understanding is one of the course’s objectives.

Technology has also allowed for the development of new high-frequency trading strategies that dominate trading volume on European and North American equity markets and are developing rapidly in Asia. Some of these strategies provide liquidity but their overall effects on market quality, the cost of trading, and systemic risk are not yet well understood. This course presents recent academic evidence on algorithmic and high frequency trading strategies and discusses their consequences on market quality and the trading environment. Understanding high-frequency trading strategies and their consequences helps in optimising execution in today’s markets. It is also a basis for developing appropriate regulatory responses to high-frequency trading strategies that limit market abuse and systemic risk without obstructing competition among traders and markets.

Besides high-frequency trading strategies and dark pools, short selling has been high on regulatory agendas over the past decade. Short selling is an important traditional source of liquidity and represents a key ingredient for many asset management and trading strategies. This course reviews what short sellers do, how their activity differs from other trading, and presents recent evidence on how short-sellers impact markets and other traders. It also assesses the consequences of the 2008-2011 bans on short selling that were imposed around the world and discusses the current regulatory agenda.


Course Instructor:

  • Ekkehart Boehmer, PhD, Professor of Finance at EDHEC Business School and Member of EDHEC-Risk Institute.


Key Learning Benefits:

The course will enable participants to:

  • Understand equity market microstructure
  • Measure liquidity and transaction costs
  • Evaluate brokers and execution venues
  • Understand what short sellers do and how they impact markets and other traders
  • Understand hidden liquidity and dark pools
  • Understand high-frequency trading and its impact on markets and other traders
  • Review regulatory issues and development


Who Should Attend:

The programme is intended for buy-side and sell-side investment professionals who advise on or participate in the design and implementation of execution and trading strategies. It is also relevant for practitioners working in financial regulation, supervision, and enforcement.

The course should be of particular interest to practitioners with the following functions and from the following types of institutions:

Functions

  • Heads of trading and traders
  • Chief investment officers and portfolio managers
  • Performance measurement managers
  • Chief risk officers and risk managers
  • Analysts and investment officers
  • Research officers
  • Legal counsels
  • Investment advisers/consultants
Institutions
  • Asset and wealth management companies
  • Brokerages and investment banks
  • Institutional investors
  • Consultancies
  • Market authorities and central banks
  • Proprietary traders


Continuing Education Credits:

As a participant in the CFA Institute Approved-Provider Programme, EDHEC-Risk Institute has determined that this course qualifies for 7 credit hours. If you are a CFA Institute member, continuing education credit for your participation in this programme will be automatically recorded in your CE Diary.

Please see www.cfainstitute.org/ceprogram for more information.


Execution and Trading on Equity Markets – The New Landscape: