Longtime industry executive is using decades of experience building new markets
Garry Jones says his career has mirrored the evolution of the markets, from the days of open outcry, voice trading, faxed confirmations and more.
Jones was interviewed by John Lothian News at the FIA International Futures Conference in Boca Raton, FL for the History of Financial Futures video series.
He likes to say he was ahead of the curve, or tried to be. He came to Wall Street, after going to Stanford University Graduate School of Business, and started as an options trader.
Jones was an early adopter of Bloomberg when he was at Bankers Trust and Merrill Lynch, using it to manage risk.
Jones, who worked for Euronext.Liffe and NYSE Euronext, recalled LIFFE as once the largest futures exchange in the world as the markets moved electronic. LIFFE was nudged into electronic markets by Eurex, Jones said with a straight face.
At another stop in Jones career, he was present for the initiation of BrokerTec, an electronic platform for trading government securities and repo.
Espeed was the dominant player in the market, and BrokerTec was meant as a bank-led competitor that would allow the banks to control the governance, Jones said. BrokerTec was designed to improve trading and clearing processes and to reduce costs.
Jones said that the cost of a trade when he was at Merrill Lynch was $100 per million to trade Treasury products. When he left BrokerTec, the cost was $1 per million, he said.
Other electronic markets followed in the electronic space in Treasuries like MarketAxess and Tradeweb, he said.
Jones was hired by Hong Kong Exchanges & Clearing to lead the London Metal Exchange and speed up the adoption of electronic trading. However, the members and firms were reluctant to change, he said.
After Jones left the LME he retired, but he joined the boards of some banks and tech companies. That led to an opportunity to lead a tech company, NovaFori.
NovaFori looks at the digitization of markets, Jones said. These are real world companies that are looking for digital solutions to analog businesses.
Jones spoke about some of the concerns of the regulators he heard from at the FIA Boca conference.
He said the biggest threats to the markets are the weakest links.
He told the story about the BrokerTec Futures Exchange and what the strategy of the bank-led ownership group was, which was to force rule changes and fee reductions at the dominant exchanges. BrokerTec never succeeded in getting many customers to use the markets, but was successful in getting the Chicago Board of Trade to reduce its fees, Jones said.
Cantor Fitzgerald also reduced its fees in the cash Treasury market because of the entrance of BrokerTec, he said.
BrokerTec was a response to a single dominant player in a market, Jones said, but the result of the effort is more from the “thread than the reality” after considering all the heavy lifting that goes into establishing a successful futures market.
Jones was at NYSE Euronext when the deal for Deutsche Boerse and NYSE Euronext to merge was announced. It took two years before the European Commission blocked the merger. Jones was running LIFFE and Andreas Preuss was running Eurex and they worked to put the two exchanges together to create a European champion to take on the CME Group.
After the deal was scuppered, both sides knew everything about each other. LIFFE decided to push the cash and derivatives markets together, but Jones told them to instead invest in their derivatives business.
Instead, he left NYSE Euronext and took gardening leave. However, when NYSE Euronext was later being acquired by Intercontinental Exchange, Jones said he worked for ICE on the acquisition as a consultant.
Jones was looking at the business plan for the company that would be renamed NovaFori, which means new markets in Latin, when he was asked to run it. This was January 2020, right before the pandemic.
