Credit Suisse’s Sheftel quits for high-frequency trading company

Ryan Sheftel, global head of fixed income e-commerce at Credit Suisse, has joined a high-frequency trading company in a move that illustrates the influence of new regulatory pressures and technological changes sweeping across Wall Street.

Mr Sheftel joined Global Trading Systems to help expand its electronic rates trading business, where the HFT company makes markets in assets including US Treasuries and futures tied to the government debt, according to people familiar with the move.

A spokesman for the bank declined to comment. When reached by phone Mr Sheftel declined to comment beyond confirming his departure from Credit Suisse last week.

The move triggered discussion among Wall Street traders as they consider the future of Wake USA, the Credit Suisse electronic market-making business that Mr Sheftel had developed and led alongside Frederic Dassori for the past eight months.

Wake, a partnership with the HFT company Tower Research, is viewed as the bank’s response to massive technological and regulatory changes that have overtaken banks’ bond trading businesses in recent years.

New rules combined with newfound risk-aversion have encouraged many banks to cut back on their bond trading businesses and encouraged a shift towards electronic trading – particularly for standardised assets such as US Treasuries.

At the same time, new rules mandate that a wide variety of derivatives now trade on electronic exchanges and HFT firms have been stepping up to capture a larger slice of the business.

Global Trading Systems wants to increase its presence in electronic rates trading as it seeks to tap into the twin trends, according to people familiar with its strategy. It uses proprietary technology to trade assets including stocks and bonds, competing alongside other HFT companies like Jane Street and Hudson River.

Wake made headlines earlier this year after the Financial Times reported that Credit Suisse was considering selling a stake to outside companies to help expand the business. Spinning off the business could allow the bank to deconsolidate Wake, a Credit Suisse subsidiary, and help free it from new capital rules that apply to banks.

The idea of private investors undertaking market-making functions – traditionally the purview of Wall Street’s largest banks – was viewed as a novel one at the time but it is unclear whether discussions for a spin-off are continuing.

Wake continues to operate under Frederic Dassori and in partnership with Tower Research.