StreetsTalksto podcast

Challenging Thinking. Shaping Debates. Influencing Outcomes.

StreetsTalksTo BTON Financial

Published 16 September 2020

We kick off Series two with a fascinating conversation with Dan Shepherd, CEO and Caroline Holmes, COO from BTON Financial, the independent outsourced dealing desk for assets managers. BTON Financial helps asset managers rethink their trading infrastructure in an environment of increased regulatory pressures and margin compression. By using BTON Financial buy side firms are able to continue to drive greater performance, quality of execution and ultimately returns for end investors.  Delivered as SaaS, asset managers can rest assured their investment intentions are not undermined by poor execution quality as a result of inadequate and legacy technology. 

In this episode we discuss why outsourced trading models are in such demand at the moment,  with Covid-19 accelerating and already existing trends industry outsourcing.  We talk about the importance of operational resilience as businesses adjust to new working models as well as upcoming regulations industry participants need to pay attention to – including  the Senior Manager Regime, which brings personal accountability to the fore, and, of course, Brexit. Dan and Caroline also share the reasons why MiFID II is their favourite piece of regulation, and why, when it comes to modernisation, we need to think more like Gen Z. And as always, we find out what they’ve been doing to keep going throughout lockdown.

Dan Shepherd

Dan founded BTON Financial in 2017, realising that he could help asset managers take advantage of the opportunities arising from MiFID II regulatory change. Prior to BTON Financial, Dan was head of sales and marketing for the LSE’s TRADEcho MiFID II solution. During his career, Dan worked at leading prime brokerage firms in Europe and Asia, including Societe Generale, Marex Spectron, ING Barings and MF Global, and has helped build and sell low latency trading FinTech infrastructure company Algospan.

Caroline Holmes

Caroline joined BTON Financial after more than two decades working as a regulatory and transformation expert predominantly across the investment and asset management community. Previously, she held Program Director roles for the Bank of Montreal and BMO GAM Asset Management, and MiFID II Program Director for Principal Global Investors. Prior to that, she was Head of Regulatory Change Delivery for Columbia Threadneedle Investments and Change Management Consultant at PwC. She started her career in Investment Management at Jones Lang LaSalle.


Julia: Hello. My name is Julia Streets, and welcome to the podcast series, StreetsTalksTo.

In each episode, I’ll be interviewing CEOs from some of the most influential firms, bodies, and initiatives in the financial services industry. As every CEO will testify, one of the critical factors of success lies in the strength of the team, so on each episode, we invite the CEO to bring along a colleague and together we’ll be looking at what’s at the very forefront of innovation and change. We’ll be thinking about the challenges facing their clients and the industry at large, and uncovering the opportunities that exist both today, and as we look ahead, particularly as we navigate these extraordinary times. I hope you enjoy the series, which you can find on all good podcast channels, and all the episodes are listed on our website Thank you for listening.

Welcome to StreetsTalksTo BTON Financial. BTON Financial is an independent outsourced dealing desk for assets managers. By outsourcing their dealing desk to BTON, asset managers can take advantage of new liquidity opportunities whilst also ensuring compliance with MiFID II best execution, trade and transaction reporting requirements. In other words, BTON Financial helps buy-side firms implement trading strategies effectively, and ensure that investment intentions are never undermined by poor execution quality as a result of inadequate and legacy technology. Everything that BTON Financial does is delivered over a Software-as-a-Service model.

I’m delighted today because I’m joined by Dan Shepherd, who’s the CEO. He founded BTON Financial back in 2017, realising that he could help asset managers take advantage of the opportunities arising from MiFID II. Prior to BTON, Dan was Head of Sales and Marketing for the LSE’s TRADEcho MiFID II solution. And throughout his career, he’s worked at leading prime brokerage firms in Europe and also in Asia, including Societe Generale, Marex Spectron, ING Barings, and MF Global, and has helped build and sell low-latency trading FinTech infrastructure at a company called Algospan.

Dan, wonderful to have you with us today. How are you? Are you well?

Dan: Hello, great to talk to you today, and see you.

Julia: I’m delighted today, you’ve brought along Caroline Holmes, your COO. Let me tell the listeners a little bit about Caroline. As a MiFID II and Brexit regulatory expert, Caroline has a wealth of expertise and market structure change and its impact on organisational requirements. She joined BTON Financial after more than two decades working as a regulatory and transformation expert, predominantly across the investments and asset management community.

Previously, she held program director roles for the Bank of Montreal and Asset Management, and MiFID II Program Director for Principal Global Investors. Even before that, she was Head of Regulatory Change for Columbia Threadneedle Investments, and Change Management Consultant at PwC. And she started her career in investment management at Jones Lang LaSalle. Caroline, thank you for joining us today. It’s great to have you on the show.

Caroline: Hi Julia. It’s great to be here.

Julia: I’ve been really looking forward to this conversation. Where we start the show always is less about what you’re doing, but more on your thoughts of what’s going on in the industry at large and particularly what’s keeping our clients awake at night at the moment.

Dan, let me come to you first of all. When you’re talking to clients, what are they thinking about right now?

Dan: There’s one main topic, obviously that we don’t need to really give too much detail because everyone knows what it is, and that is obviously business continuity and working from home, as well as making of course, some firm plans for 2021. I think a lot of people have been in a holding pattern for 2020, obviously with working from home for the past five months, has highlighted a number of things, but working from home has obviously been the main one, but there’s been a holding pattern. I think over the coming month of September, I think we’ll find a lot of people putting in strategy and making plans for 2021. There is this phrase I often use, which is failing to plan is planning to fail. I think that’s the main concern right now.

Julia: And of course, as we speak, this is recorded during the summer months, going live in September, and budget season always happens in October. I think as we reflect on the last four or five months, as you were saying, as we think about market volatility, how have clients found that in the whole? When they’re talking to you about looking at the next quarter, what are they particularly thinking about in terms of regulatory change or thinking about in terms of performance?

Dan: Well, Asset Managers definitely have less budget to invest in technologies to get that competitive edge over their peers. There’s obviously been immense volatility over the past few months, so returns are high on the agenda, but I think essentially, what they need is access to innovative, sophisticated technology that doesn’t undermine their trading strategies and can cope with the volumes that peak in times of volatility.

The reality is that often, they’re stuck with some legacy infrastructures and business models. I think this is something that we can help with. Couple that with the general trend towards pressures on profit margins, the whole passive-active debate that’s been going on over the past couple of years, the asset management industry really has to radically rethink how they run their dealing desks, but that’s where we come in.

Julia: It’s fascinating isn’t it? Because you think about the operational reality of actually running a business, like an investment management or asset management firm today and looking at the world at large, which never stops. Caroline, as I mentioned in the introduction, you’re the MiFID II regulatory expert. What are you particularly talking to clients about at the moment?

Caroline: Well, it’s really interesting. We got through MiFID II, then Brexit hit us. But the regulatory pressure hasn’t eased. Now, I think what’s on a lot of people’s minds is the Senior Manager Regime, which really does bring in personal accountability within firms for doing things the right way.

Just to pick up on Dan’s point on remote working. At the time COVID hit, I was actually sitting there on the floor in an asset manager, and the mobilisation just to get the traders working from home over what was really a very short period of time was really impressive and very encouraging. I don’t think anyone ever envisaged that traders could work from home, but it happened and here we are now.

But the question is how long can that go on for? I think the industry needs to evolve and think about how things can be done differently and how they can leverage technology and focus on what really matters. The last few months have been about making sure that people can continue to fulfil their roles and meet customer needs from home, doing their daily jobs, but we need to move forwards. There are other challenges looming on the horizon, which I’m sure we’ll come on to.

Julia: Well, let’s get straight into that right now actually, because one question I’m asking everybody at the moment is what are we at risk of forgetting? And in the regulatory world, of course, there is so much. Is there anything you’re concerned that people may be overlooking or they’ve put on the back burner?

Caroline: I think it’s quite interesting. Brexit’s happening, but it’s gone very quiet, but we are motoring towards the end of year. One thing I think, which we might be forgetting – everybody knows it’s happening and people have probably put in place their strategie – is we might see a divergence of UK regulation from the EU. We might see potential reviews of MiFID II and AIFMD, which the UK won’t have a significant input into.

We are definitely seeing an increased focus from the regulators on operational resilience. That’s been bubbling for a while. IOSCO, ESMA papers published, the FCA consultation paper, the Basel review at the moment. I think we just mustn’t forget the need to be able to prevent, adapt, respond, and learn from disruptions to business. Making sure operations are resilient, that continuity is in place.

Julia: Are people actively talking to you at the moment about – thinking how many months away are we, three, four before the deadline comes, and having some focus and support – are people talking to you about how you can help them?

Caroline: Yes, we’re taking a lot of calls and outsourced trading is definitely a hot topic in the market at the moment. I think it’s tough when people have been locked down at home and we’re really looking forward to face-to-face meetings as soon as we can. We’re doing a lot of Zoom which is interesting in itself. But yes, I think it’s definitely on the client’s minds about how they can increase their resilience and have that certainty of trading flows.

Julia: And as you say, outsourced trading is becoming, if not already, a hot topic. Now, it’s a topic that’s been around for a while. I’ve certainly been around the industry for 20, 30 years, and in the last 10, I can think about different offerings as well. But it feels to me that now seems to be the time for a proposition like BTON Financial.

Let me just hear from you, Dan, I’m really keen to get your thoughts on why now? What are the really compelling reasons why people need to take outsourced trading really seriously?

Dan: Well surely, it definitely was a hot topic at the start of the year and it’s blazing hot at the moment. I think working from home has highlighted the need for operational resilience for business continuity plans. And of course, automation and servers, we don’t necessarily need to worry about them having to take the time off. They’re there, they’re in the data centre or in the cloud in an instant. It’s definitely a hot topic. There’s obviously lots of pressures as mentioned on profit margins and optimisation of teams and operations. I think that the automation factor and outsourcing is just a very large topic for asset managers coming into the end of the year.

Julia: Let’s get into that a little bit deeper. So when we talk about the technology and the offering around technology, part of it is around having the capability to be able to hand off your trading desk. But the other part of it is about having the technology and the operational setup that would reduce your operating costs, particularly at times, we were saying, when the margins are being squeezed, performance is really tight. When you look at the technology offering, how do you describe that? What is the heart of the offering?

Dan: The technology is actually really exciting, I have to say, even if it’s me saying it. The core product is the Smart Broker Router. Everyone knows what a smart order router is. That’s what the brokers use to ascertain the best trading venue or exchange for their stocks and shares at trading. The Smart Broker Router ascertains the best execution algo at the most appropriate broker for our end client, therefore producing the best execution policy for our clients. We help them use the data within our system, we push that through machine learning and then that continuously improves over time and gets the best possible result for our end clients, and that’s what we’re here for.

Julia: Of course, in the context of MiFID II, the best execution requirements are front and centre of all conversations around performance and actually justifying the performance in the regulatory reporting as well. I’m really interested that there are different outsourcing models that you offer, because some clients at the arguably enlightened end may just go, “Right, let’s just change all of our offering. Let’s entirely 100% outsource. We do not need to have a dealing desk.” Then there will be others who are slightly less keen to do that, let’s say. Talk to us about how the different models work as well.

Dan: We basically have three models. We have one, the full outsourcing of your dealing desk. We manage everything. We obviously manage the broker connectivity, the connectivity into the client, and we manage all of the trading and push that all through our trade cost analysis. We talk to the Basic Execution Committee at the asset managers, and we maintain that for them.

The second one is more of a hybrid approach, whereby we may interact with the head of dealing and they will outsource some of their trades to us and maintain control on some of the large-in-scale or esoteric instruments that they can still really add a great deal of value to, as a Head of Dealing with lots of voice experience and connections into the market.

The third one is more for emerging managers, which is a bit like a dealing desk in a box, I suppose. And we help them in their process of starting up and getting to market, and finding the most efficient way to connect into all the different brokers and trading venues.

Julia: I think this is going to be really fascinating because there will be some firms who want to launch now, and some of the best businesses are launched at the time of a crisis. And there’ll be others who are looking for investment opportunities and wanting to get to new emerging markets as well. What you’re suggesting is it’s a really quick way of getting set up, but also getting access to new ideas, which I think is ripe for being a good, compelling reason about why now.

Dan: Yes, absolutely, and just to jump in again on that is actually, a lot of firms may only be based in the UK, so they may want to just outsource their Asian equities to us, or their US trades to us. That’s another hybrid blend if you will, so that we can do some heavy lifting in Asia, where I lived for eight years, so it’s obviously a strong area for me.

Julia: Caroline, you were saying earlier about you’re always thinking about regulation, and I explicitly picked up on best execution as a concept as well, and regulatory reporting. When you’re talking to clients, and then when you’re out, talking about BTON Financials’ outsourced offerings as well, are there any particular elements of regulation that people need to keep front of mind?

Caroline: Well, best execution is the heart of the business and achieving the best performance for your customer. I think what a lot of this regulation has done is made available a lot more data in the market, but it’s not really useful unless you can analyse it. And effectively, we’ve built a bit of technology. We’ve got clever algo and we are analysing the data and anonymising that data, so that asset managers can actually have comparisons to a peer group on an anonymised basis.

I think the other thing is having run many regulatory projects, they are tense. They are hard. The ground moves from underneath you. But actually, this solution is really simple to implement. It’s just a SaaS solution, and so there’s no heavy lift. It’s clever, but it’s really operationally simple.

Julia: I think for all the panels that I’ve hosted, all of the trading conferences that I’ve been at, either digitally or physically, of course, data is the number one question. Everybody’s saying, we talk about best execution, we talk about regulatory reporting, but also being able to unlock the insights we didn’t have before, and of course, data is really at the heart of all of that.

What I’d love to do now is move on to, we’ve talked about what clients have been thinking about during COVID and we’re thinking about what clients have been navigating as they all of a sudden end up working from home and what that’s meant for them. I want to explore how that’s been, how lockdown has been for BTON Financial, both as an organisation and you personally as well.

Caroline, can I come to you first of all? How has your lockdown experience been? I noticed that while we’re recording this during lockdown, however, you’re in the office, both of you as well. So I’d love to hear your thoughts on how lockdown has been.

Caroline: It was very interesting for me. I joined BTON two days before lockdown and then immediately catapulted into working from home. Personally, that meant five of us in our home, some teenagers, another working parent, so that was all very interesting, but good fun. And yes, we have come back in. I now cycle in Central London, which I actually really enjoy. So we’re a hardcore cycling team here. I think work wise, we just do a lot more Zoom calls. I’m not sure I knew what it was before lockdown, but I certainly do now, and many other media like that.

But I do look forward to the day when we can see people again. We’ve seen one or two, it’s getting a bit busier. There’s certainly more traffic on the roads, but all in all, I think it’s been an interesting time or it still is.

Julia: We were saying earlier about different models of outsourcing, of course, there are different models of working and there’s almost like a hybrid way, which is, I think those who are in the city and can have those meetings, who are amenable to face-to-face meetings, and then be able to use Zoom if people still are working from home as well.

Dan, how about you? It’s funny, Caroline talks about being an avid cyclist. I know you are too. Tell us how lockdown’s been for you.

Dan: Well again, very exciting. We’ve rediscovered cycling. I did cycle commute for a long time in the past, so I’m doing that everyday now, which is good fun. Lockdown for me, it’s been very interesting because I actually had COVID-19 right at the start, so was locked away for some time during that, which was character building, I suppose we can say.

But subsequently, I just came into the office. I’ve tried to work from home, and some people are good at it, Caroline for example. Me, not so much although, there’s obviously been the odd Zoom call with a small child’s head coming into the bottom left-hand corner, which actually there’s a lot more leeway for these days actually, which is good. The square aupair has come into play a little bit as well, with the TV and the Zoom call at the same time.

But it’s been generally actually quite good, I mean good in a certain way. We’ve been hiring. We’ve hired a few people over the period, which I think everyone likes to hear. Caroline started two days before lockdown. We’ve just got another person that’s come on board. It’s a growth phase. I think again, the lockdown has highlighted the needs for an automated solution for a lot of firms. It’s really brought us to the forefront of the outsourced trading solutions and the asset management discussions as a whole really. But yes, it’s been interesting.

Julia: You say you are in a growth phase. Has there been a lot of interest? Have you been doing business during lockdown?

Dan: Quite amazing, actually. It’s been really good. The amount of interest in outsourced dealing as a whole is obviously much higher. I think we, as a technology solution in the outsource space seem to have hit the front of the queue, if you will. We are fielding an immense amount of calls. We’ve got constant Zooms. The Zoom fatigue is almost kicking in, where you’re constantly staring at the screen and talking to people. But it’s been fun. It’s good. I couldn’t ask for more actually, I have to say.

Julia: Caroline, you were saying about the reality of three teenage children and two working parents. There’s a question I’m asking everybody who comes on the show, just in terms of how have you kept going, is there anything you particularly enjoy doing during the lockdown that’s kept you all functioning well?

Caroline: I love getting outside and obviously, we couldn’t really go outside. I have a small little patch of a garden, which I have been developing and trying to form different social spaces in it. I have to say, I have planted and grown things I didn’t even know I had and the garden sheds. That has been quite fun.

Julia: Wonderful. Dan, how about you? What’s kept you going throughout lockdown?

Dan: Again, the exercise. I think that is key for everyone really to keep sane in these times. I may be the only person in the country that doesn’t have a Netflix account. I must admit, I haven’t watched much TV. It seems like 40% of all waking hours of the UK public over lockdown were spent watching TV, I saw in the paper actually, which is quite amazing.

But obviously, the podcasts are getting me through. Everyone I know listens to Joe Rogan, I think that’s been quite a good one. And obviously, StreetsTalksTo, that’s a good one. I think you’ve heard of that one. I guess the whole music thing as well. I’ve been listening to some good music, found some good music.

Julia: Go on. Give us some tips.

Dan: All right. This is a good one. There’s a band called Moderat, who I seem to be listening to a lot, and they are a German band. That’s not often one gets a recommendation for German music.

Julia: It’s not. We’ve not had that before. Gardening and German music is not where I expected this conversation to go. Let’s go back to again, another question I’m asking everybody. Actually, in terms of, it’s an odd one, but go with it, which is favourite piece of regulation. It’s a bit of an odd segue, but actually, it’s very important. We were talking earlier about your world, Caroline, which is all around what are we at risk of missing, and then also thinking about regulation. What’s your particular favourite piece of regulation at the moment?

Caroline: There is only one. It has to be, and I might be the only person who loves it, but MiFID II. It was just so huge, so broad, so challenging. I did it a couple of times. I finished it. In fact, it was ready early and then they delayed it, but there you go. We had a couple of rounds of that. And then I thought what could be more exciting than MiFID II? Well, it was Brexit and it really was very exciting, because they did that and of course, there were more delays on Brexit. But right now, I’m working on the GDPR and just making sure that BTON is on the case, fully compliant and actually future-proofing for the end of year. 

Who knows what’s going to happen on December 31st? Will we get that adequacy decision or not? It’s right to the wire, but that’s regulation for you.

Julia: I suppose that the key thing now is to be really planning every scenario and just thinking about what are the various different outcomes and how will they present themselves?

Dan, same question to you, if I may, what is your favourite piece of regulation you’re paying attention to right now?

Dan: Again, I think I have to agree with Caroline in that it’s going to be MiFID II, because that is really about transparency and ultimately doing the right thing for the clients, and that’s a similar ethos to BTON Financial as a whole. Transparency, getting the best possible price for the clients, best possible execution. So that’s what we built the company on completely really, is transparency. Good behaviour and transparency.

I’d also like to say the senior manager regime SM and CR because ultimately, it makes people personally accountable. Whilst regulations can be okay, that sounds like a really great thing, when someone has to actually sign a piece of paper, say, “Yes, I am personally responsible,” I think it really focuses the mind and all gets very serious at that point. That’s an interesting thing that’s coming this year as well, the SM and CR.

Julia: They’re big buzz words, aren’t they? Which is the thing about the transparency, but also the accountability. It sits very much on individual shoulders, and really stepping up and finding more efficient ways of running organisations, but also being absolutely 100% accountable for the decisions getting made and the performance that’s returned or not, which is really fascinating.

Anybody who’s interested in finding out about BTON Financial, the website is, as you would expect, Also available on Twitter, @BtonFinancial. Do look them up.

What I’d like to do now is just go into some closing thoughts, really as we sit here. We’ve talked about Brexit coming down the track, we’ve talked about best execution and MiFID II is not going away, it may come in different forms as well. But really, I’d love your thoughts on the road ahead and what you’re thinking about, and also what advice you give your clients as well as they are planning ahead? Caroline, let me come to you first of all for a regulatory point of view.

Caroline: I think the industry was just forced, almost instantly to do things differently and we need to build on that and evolve into modern organisations. One thing on my mind is, I think we need to think more like, is it Gen Z like the teenagers think? They’re amazing. That would be my take on it, often 

regulation is running far ahead of the legal system, but we just need to get adept and leverage technology.

Julia: Everyone’s talking about wanting to have it digitally enabled. Everybody’s talking about the data and the platforms and the lightness of cloud and SaaS models, etc. This now feels like a really interesting time to reimagine in many ways as well.

Dan, how about you? What are you particularly thinking about, and what advice are you giving clients?

Dan:  Well, that segues nicely into what I was just thinking actually, which is collaboration amongst asset managers. How do they collaborate with each other to become a mutually beneficial solution? Obviously, that’s where BTON Financial comes in with our data and Smart Broker Router, and what a key thing this recent time has been, where failing to plan is planning to fail.

I think people need to put some things into action and some trigger pulling needs to be taking place in order to evaluate your business continuity plan, evaluate your brokers and their performance, evaluating your technology stack and whether it would be more mindful to outsource that to get the best possible solutions. And of course, evaluate your workflow and automate as much as possible so that you’re ready for the next time, let’s hope not, if it ever happens again. Therefore, that would free up, from an asset management perspective, free up your time for the core business, which is for generating activities really, so let’s not have your intentions undermined by any poor technology or legacy stacks, or outdated business models, really. I think that’s where I’ll leave it.

Julia: I think it is a really fascinating time. I used the word earlier about reimagining. And something you touched on there Dan, in terms of the collaboration within an industry and the ability now to be able to take data from like-minded institutions and to be able to bring that data together and create almost new data sets as well, to be able to extract more bang from them, being part of others at BTON Financial clients community, which is really interesting to think about. It’s exactly as you were saying, Caroline, think more like Gen Zs, thinking more like  teenagers do in creating new opportunities and new products as well.

It’s been a fantastic conversation. If you think about it, we’ve talked about everything from Brexit and MiFID II, thinking about what clients have been through and what’s galvanized change. And then also thinking about the road ahead, and what clients and the asset management, investment management industry should be thinking about for the remainder of 2020.

Caroline, it has been wonderful to have you on the show. Thank you so much for joining us today.

Caroline: Thank you.

Julia: Dan, great to see you as always. And thanks again for being on the show, sharing your thoughts.

Dan: Absolutely. Huge thanks. Thanks to you and thanks to everyone who listened.

Julia: Well, you took the words straight out of my mouth because my final words were going to be to thank the listeners for listening in today. I’ve been Julia Streets, thank you for listening to StreetsTalksTo BTON Financial.

Kieron: This episode of StreetsTalksTo was produced by me, Kieron Yates, on behalf of Streets Consulting Limited. Streets Consulting is a business development, marketing, communications consultancy that’s focused on helping Fintechs from the smallest startup companies to some of the world’s largest global organisations. Everybody’s trying to innovate and everybody’s trying to grow. You can find this episode on and using the hashtag #StreetsTalksTo. We can be found on LinkedIn and on Twitter at @StreetsConsult. Thanks for listening.