KCG Hires Goldman's Seigne to Expand European Electronic Trading

  • Seigne will oversee sales for equity ETFs and program trading
  • Crane says customers want `best execution' despite MiFID delay

Algorithmic trading firm and brokerage KCG Holdings Inc. has hired former Goldman Sachs Group Inc. managing director Michael Seigne to help develop its European business among bank and investment-firm customers.

Seigne will oversee sales for exchange-traded funds, program trading and electronic trading in equities at KCG in London starting in the second quarter. The move reunites him with Rob Crane, his colleague of 12 years at Goldman Sachs, who has been KCG’s head of European execution services since last summer.

“We are very pleased to have Mike join our team,” Crane said. “He brings a wealth of experience in the European Union marketplace.”

KCG Europe is among the electronic-trading specialists to have hired bank executives at the same time as regulation reshapes the region’s trading. EU officials have sought, for example, to break apart the investment-bank practice of charging a single fee for research and trade execution. They also want investment firms to prove they’re giving “best execution” to clients.

Such developments could make the market for brokerage more competitive, providing an opening to the banks’ rivals. The rules are part of an overhaul of financial-market regulation known as MiFID II. The package, a key part of European efforts to make markets safer in the aftermath of the 2008 crisis, comes into force in 2018. It had been due to take effect at the start of next year.

“Best execution is something we should be pursuing anyway,” Crane said.

KCG Europe, which is run by UBS Group AG alum Phil Allison, sells algorithms and executes orders for investment managers and hedge funds. Crane also wants to sell KCG’s services to retail brokers. He says the firm executes more retail orders than anyone else in Europe.

MiFID II will also revamp Europe’s electronic markets. Broker crossing networks -- a type of dark pool -- will eventually disappear. BCNs don’t display prices before a trade takes place, and counterparties are anonymous.

KCG Europe plans to close its two broker-crossing networks, but keep its status as a systematic internalizer. SIs are different because they display prices and the SI is always on the other side of trades with customers. KCG will cross retail trades with institutional orders as an SI.

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