Mark Phelps has earned a sterling reputation in the futures industry by driving business at many levels throughout his career. His path to Group Chief Executive Officer at G.H. Financials Limited began over 20 years ago as a pit official at The London International Financial Futures and Options Exchange, LIFFE. Along the way, Mark has successfully built strong business relationships among prop shops that have been a leading source of liquidity for major futures exchanges across the globe.
I’m thrilled to have Mark participate in our 5 Questions blog series and share his views on where the futures industry is heading and how his customer base is leading the way on the TT® platform.
Brian Mehta, CMO
How did you get your start in the trading industry?
Mark: I saw an advert in the paper for a pit official on the LIFFE floor. It said, “No experience necessary,” which was important as I didn’t know anything about finance and even less about derivatives! After seeing the advert, I immediately walked into a clothes shop and bought a complete outfit—shoes, suit, shirt and tie—changed into my new clothes and went straight into the recruitment agency to apply for the job. Six weeks and four interviews later, I had a job offer, and I’ve never looked back. Upon landing the job, I spent a couple of years on the LIFFE floor where I really struggled as a pit official, but it gave me a great grounding in the financial markets and just as importantly introduced me to lots of traders and brokers. From there, I moved up into a sales role where I promoted the exchanges STIR products. That’s where my time on the floor really helped me as I personally knew a huge amount of people who migrated to trading futures electronically. Then in 2010, I moved with the exchange to Chicago to help with the push into U.S. fixed income markets with NYSE LIFFE. At the end of 2012, I moved to GHF as Global Head of Sales and did that up until a year ago when I moved back to London to become Group CEO.
How much impact has Brexit had on the UK trading community, and what will be the impact going forward?
Mark: Well, there is no doubt it’s had an effect, although Brexit hasn’t actually taken place yet and I am not sure that it ever will! What I have certainly seen is that it has made trading firms in London explore the options there are to set up shop in Europe. I’ve heard of people going to take a look at places such as Malta and Dublin, but the location I hear most frequently is Amsterdam, particularly for HFT firms.
What trends do you see emerging in the futures industry and what will drive growth over the next five years?
Mark: Firms are really starting to look at more markets to drive their growth. Most firms all trade the mega exchanges of CME, ICE and Eurex, but today I see them coming to us for access and clearing to markets such as ASX, HKFE, SGX and TMX. We have plans to increase our offering into more markets and aim to be able to offer access to Brazil and the Chinese markets in 2019. If there is growth in our industry over the next five years, and I would not take that for granted, it will come from firms with fully automated trading strategies, HFT and AI firms, sadly at the expense of the manual trader who is being squeezed out of the market by rising costs, which are increasing the barrier to entry for what was once a major market segment in futures trading.
GHF has embraced the TT platform. Can you provide us with feedback on what sold GHF on moving to TT?
Mark: We were one of the first firms to migrate business in a meaningful way onto the TT platform back in 2017. G. H. Financials is purely a clearing firm, so we are largely driven by our clients when it comes to what technology we support. However, we see TT as leading-edge technology that allows our manual point-and-click trading clients to benefit from lower latency access, increased access to global markets and a platform that allows them to start to bridge the automation gap.
How has the trading business—in particular—proprietary trading, changed over the last decade?
Mark: I worked in sales at LIFFE for many years and focused on individuals and prop trading firms. When I came to G.H. Financials in 2012, these were the clients that we were clearing for. Today it’s much different. We still clear for many manual traders, but lots of our clients today have fully automated trading strategies. Hence I’ve been involved with open outcry prop traders, manual screen traders, algo firms and can now add AI firms to this list. Although prop trading has changed over the years, the one thing that has remained is that the successful firms tend to be those that can handle change and are constantly looking for their next trading strategy!