James Baugh, who had been head of sales for both the LSE and Turquoise – the equity market the UK exchange group owns with major banks – will join Citi later this year as a director and head of European market structure, according to people familiar with the situation.
He will work within the bank’s equities business, advising on regulatory changes such as the implementation of the revised Markets in Financial Instruments Directive, or Mifid II, and liquidity solutions, one person said.
Baugh, who has been with the LSE since 2004 and was named as one of FN’s Rising Stars in Europe’s trading community in 2010, fills a role formerly held by Dan Mathews, who left in May to launch a fintech startup.
Baugh had been heavily involved in a number of the LSE’s new electronic trading services, including Turquoise’s Block Discovery and Uncross initiatives, designed to help investors trade larger-sized orders.
He will become one of several recent joiners hoping to reinstate Citi as a major force in electronic equity trading. It has fallen down industry rankings in recent years, and was the ninth-ranked bank by pan-European customer equity flow in 2015, according to IHS Markit.
Other recent hires include John Lowrey, who joined as global head of cash electronic execution in July 2015, and Leonie Ryan, as reported by FN last month.
Having a dedicated market structure specialist as part of an electronic equities trading business has become crucial since Mifid came into force in November 2007 and overhauled the equity market structure in Europe. Most banks created a head of market structure role to help them keep abreast of the regulatory changes.
One buyside trader told FN: “The more I understand what’s going on from a market structure standpoint, the more important and the more valuable a trading desk becomes to the firm.”
Those in the roles typically feed into the development on new products but also guide clients through regulatory changes and new trading initiatives via newsletters, events and one-on-one briefings. They are also often the point-person for consortium initiatives, with many holding board roles on trading venues.
Increasingly, market structure experts are being called on upon to help provide strategic direction across banks, given the wide-ranging nature of Mifid II, which comes into force in 2018.
Mifid II will have a profound effect on European market structure, bringing more transparent trading methods across a much wider range of asset classes and the changing the way investment research is purchased.
The head of market structure at one bank said: “I am increasingly advising a much wider audience of people. At clients, that now includes chief information officers, chief operating officers and chief executives. Internally, it is heads of equities and fixed income trading, regulation, compliance and exchange analysts.”