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K&KGC caught up with Matthew Cousens who we know from his previous role at Credit Suisse, and is now the “Managing Director, Head of Equity Execution Sales, EMEA” at Barclays. 

Asking Matthew about his rationale for joining Barclays he answered;


“Barclays has a unique client offering, with a powerful investment program for further growth across equities, including markets and electronic trading. Our Global Head of Equities, Stephen Dainton, was appointed in September 2017 with the remit to grow Barclays’ equities franchise globally. He implemented a strategic plan that is proving successful. Our equities franchise is one of the fastest growing on the Street as per the first three quarters of 2018.” 



Why should the buy side include Barclays among their preferred brokers? 

“Barclays has proven to be an important execution partner for many sophisticated buy side firms reflected by high execution performance rankings and core algorithmic trading capabilities. Additionally, our ‘next generation’ algo and SOR platform is extremely exciting. The new platform is centred around simulation and advanced signal generation and is built on a sophisticated experimentation framework. 

I am particularly excited about the developments of our next generation trading algorithms and Smart Order Router (SOR) which will be live for most European markets in 2019, and is already live for much of our US flow. The current EMEA trading algorithm stack was built in 2012 and has proven to be a solid product, delivering performance which achieves consistently high rankings with our major buy-side clients. The next generation products are master minded by Daniel Nehren, Head of Statistical Modelling and Development for Equities. Having previously worked for both buy- and sell-side firms, Daniel brings an unparalleled level of knowledge and experience. His research, with input from various Fintech firms, will give us a unique way of looking at next generation algorithms. 
Our latest SOR optimisation has already increased our hit rate by 10%, meaning we now have fill rates across Europe of around 97%.”  



What do you think is unique about Barclays’ services? 

“There are a number of ways Barclays differentiate from other sell-side firms. We focus on services and technology in addition to unique liquidity offering.” 



We summarised Matthew’s key points as follows:

  • Liquidity access with zero market impact. “Barclays fundamentally differentiate in the way we manage our central risk business. Our automated “CapComm” model interacts with algorithmic orders, high touch orders and flow from our PT desk. We package up the liquidity we can generate across the floor into a real risk transfer model so we can recycle liquidity back to our buy-side clients. For example, we can offer fills to child slices of the algorithms to interact with the SI central risk book which is completely anonymous. It builds a position that the central risk book has no visibility of until after the parent ticket is complete. The advantages are a) zero market impact and b) we let the book build so we can recycle liquidity back through provision of risk and our IOI platform and other means into a high touch environment. Our CRB is a passive risk book with an average holding period of about 6 days where we internalise and recycle around 70% of our flow. This is very different to other banks’ risk books that are focused on generating an individual P&L or alpha. For us, it will create an enhanced execution experience with incremental liquidity and improved performance, we aim to benefit from increased business as a result.”


  • Alpha generation is of particular focus where we have developed ground breaking ways to leverage alpha signals within the next gen algo platform. Our new strategies leverage these signals coupled with advanced simulation models to adapt their behaviour to changing market conditions throughout the trade cycle. Barclays has incubation laboratories, in London and the US, the Rise facilities where we house and fund, at least in part, a number of fintech firms. We spend a lot of time and investment in how to use new innovations and technologies to our clients’ advantage. “


  • Advanced back testing and simulation. “We are spending a lot of time looking at how new, advanced simulation models can help enhance our product offering. Accurately predicting how our SOR and trading algorithms may impact the market and what performance can be achieved in the alpha generation process has huge potential. It has, until recently, been very difficult to prove for clients the breakdown of cause and effect isolating your market impact from natural alpha in an order. Our simulation models are being developed with the help of specialist fintech firms to better model the outcomes. It is now a key component of our signal generation.” 


  • Low latency DMA and FPGA. “Barclays has amongst the most advanced low latency DMA and FPGA solutions available. In 2018, this product was brought under the umbrella of Naseer Al-Khudairi who joined Barclays from Credit Suisse in March to run Global Multi Asset Electronic Trading. We can leverage this market leading low latency technology within our SOR and ultimately gain faster access to liquidity. Our FPGA technology is capable of processing an order in less than 300 nano seconds - including receiving an order, verifying it, risk checking and sending the order to an exchange. Marrying cutting edge technology with the rest of our cash equities business will certainly improve the outcome for our clients.” 


  • Transparency and control. “Our “Specs” portal specifies our client’s routing preferences which they directly configure and make changes to as they wish. We offer full transparency to our clients with information about which venues we traded on, with our TCA and our real-time FIX messages, including all venues.” 


  • Mid-touch experience with senior staff. “We have added skilled high touch staff to our low touch service desk, retaining experienced staff and delivering a better service to our clients.  Some of our buy-side clients are already trading 80 - 90% electronically so that means that the electronic desk is increasingly becoming the main point of contact.”

“I see our electronic Sales Traders being able to deliver a better service as they empathise and understand their client’s challenges, from a high touch perspective, combined with a specific skillset and knowledge of the low touch algorithmic trading world.”

  • Optional information sharing for enhanced collaboration. “Some clients are giving Barclays insight into the alpha profile of the order at PM level as well as the characteristics of the flow. Only our clients have full visibility of the multiple different information sources of funds, PMs with different signals and alpha profiles. Where clients have been willing to work closely  with us, it has proven to be a successful methodology to fine-tune the collaboration and to optimise trading performance.”

“Barclays’ equities growth ambitions are truly global and we have been investing heavily in products, technology and people across our platforms in Europe, the US and Asia. We have great strength in our Prime business which we are looking to grow and we have a strong balance sheet to support that objective. Barclays is unique in that we are one of the few European banks in growth mode right now.“



What is your perception of how the buy side and sell side mutually benefit from a closer interaction?
“A notable positive recent change has been the improved closer collaboration between the buy side and sell side through various industry groups such as AFME, the IA, the Plato group and buy side community groups like the Alpha Trader Forum and others that promote an open dialogue. Cross buy- and sell side collaboration has proven to deliver more refreshing, mutually beneficial solutions to the industry.”


“Extending the collaborative approach further, some buy side are also licensing their brokers to help with their trading process. Pre-MiFID II there was an industry-wide push where many buy side traders set parameters for the brokers to harmonise their algorithms. A number of the more sophisticated buy side desks are now becoming less prescriptive about their execution experience and are more comfortable with the idea of involving the sell side in helping them to achieve their objectives. The sell side can produce solutions with better outcomes if we are clear on our client’s objectives and the general profile of the orders.”


“I would like to see the open dialogue continue. There is an increasing need for harmonisation of objectives in the industry, especially in the area of regulation, which is great.”



Do you think we have reached a point of stagnating market structure changes or are we just in the beginning of changes post MiFID II and the ongoing Brexit negotiations?

The market structure is constantly evolving. We are in a place where the effects of the regulatory changes over the last 10 months can be felt and there is increasing comfort around this, however, there is still more the regulators want to achieve. 
An example of this is the Investment Firm Review, where the European legislators have identified sub tick execution of orders as an issue and adjustments to the SI regime within sub tick trading have been proposed. It is also likely that we will see further changes on venue types.
Another example is ESMA’s call for evidence of periodic auctions. This is currently in a fact-finding phase for the regulators to understand how and why periodic auctions evolved the way they have. We could yet see more changes to our regulation within a relatively short period of time, compared to how trading regulation operates today. 
I think that enough time has passed for market participants to make a judgement of the evolution of the SI framework and increasingly more clients are comfortable and understand what it means to interact with both bank SIs and ELP SIs. There are already discussions about a preliminary MIFID III timeframe with 2024 as a new target. So, we are coming into a new information gathering period for this major revision of the EU regulation. This is a constantly evolving market.”  
“When it comes to the upcoming Brexit challenges for the market, Barclays has the necessary contingency plans in place to trade in all jurisdictions to continue serving our clients regardless of the political outcome.“



Please tell us more about yourself. How would you summarise your career and what career recommendations do you have for your industry peers?

“I have worked 17 years in electronic trading.  I came into the bulge bracket world somewhat through the back door as I was running a small start-up DMA company as General Manager when I started to make the transition to a bigger firm. At the tender age of 28 years old, I was probably too young and inexperienced so I wanted to make a change and surround myself with people I could learn from. I have seen the evolution of electronic equity trading from its infancy. I have been fortunate to get to know and learn from phenomenally talented people along the way. I started my previous employment at Credit Suisse in the beginning of 2007 and was Co-Heading Sales for AES in EMEA before I accepted my current role at Barclays as of September 2018.“

“Looking back, my clearest and hardest memory on the trading floor is October 7th 2008. That was a crazy time for all of us in the industry, but that specific day was when a number of Icelandic institutions were placed into receivership. Having done a lot of business with Icelandic banks up until that point, seeing how things unfolded that week, is something I will never forget. 
What happened during those weeks and months was something a whole generation of traders had not really experienced before, the atmosphere across the dealing floor was hard to describe. 

My fondest memories probably go back to the first firm I worked at in this industry, where I started my career, and the friendships I gained helping to grow the business. Sadly, one of those friends passed away in the summer and it was a hard reminder to me of how close we became whilst we started that business up. It wasn’t necessarily glamorous, but we had the spirit and determination to make it work.“

“My motto for myself and the team is “how do we help our clients to do their job better?”

“Great relationships go a long way to open doors and help to grow a business but it is not enough on its own. Credibility and trust are hugely important in this highly automated electronic world. Sales traders today still need more than these characteristics to become successful and a key mind-set that I feel has helped my career is an open-minded attitude, accepting that I am constantly learning. I still recall myself in the very beginning of my career, assuming that I needed to project a perception of importance when I met senior and more experienced people. I learnt a long time ago that approach never works and will not help you to gain anyone’s trust. Being honest and entirely yourself is the most valuable asset any of us have.”

“Balance is the key in trying to manage your career, family and interests. I just happened to be very fortunate in recently spending more time with my children as I had some time between jobs in the summer. At weekends I dedicate a lot of time to my family and I try to get home at least twice a week in time for my kid’s bath time and stories. We are in a very happy place at home and it helps from our perspective that we live a varied family life, spending a lot of time outdoors together. We actually have two Shetland ponies, five chickens, two dogs and two cats - in addition to the three kids!

In addition to being with my family, I play golf and I love mountains, beaches, spending time in Cornwall and pretty much anything that involves being outdoors.”

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