Voice of Experience: Catherine Clay, CEO, Livevol

Catherine ClayThis week The Glass Hammer is profiling successful women in the derivatives industry.

By Tina Vasquez, Managing Editor

In November 2013, Catherine Clay received a career-changing promotion: she became CEO of Livevol, which offers options analysis and trade execution software. The CEO says the company extracts data from the market and gives clients what they need “in a sea of noise.”

If it weren’t for a call from Clay’s sister, however, she may have never entered the derivatives industry. In the early 90’s, Clay’s sister got a job in San Francisco manually updating market maker quotes at what was then the Pacific Exchange. One day she called Clay and told her this was the industry for her, believing her sister’s natural competitive nature would make her a trading floor natural – and she was.

In The Beginning
Clay began her career at Interactive Broker’s market making unit, Timber Hill. She started as a clerk and worked her way up to director of floor trading and operations, spending about 12 years on the NYSE Options Floor, overseeing a staff of 20 traders, brokers, and back office staff. While at Timber Hill, she also served on NYSE Committees and was involved with floor trading, listing, membership, and arbitration.

Her involvement in Timber Hill’s mentorship program continues to be a bright spot in Clay’s career. The formal program hired aspiring option traders, with staff running the educational programs.

“We brought candidates on to the floor and taught them how to trade derivatives. It was good to help others and empower them with the knowledge to make good lifelong investment decisions,” Clay said.

Forging Her Own Path
In 2006, Clay left Timber Hill to co-found Thales LLC, a market making firm on the NYSE Options Floor and on OneChicago single stock futures exchange. Thales employed comprehensive volatility analysis using extensive historical options data. During her time with Thales, Clay noticed a demand for this type of data from professional traders and brokers on the trading floor.

“One of the challenges the industry faces is taking the enormous amounts of live and historical data from the market and harnessing it in a way that gives it meaning,” Clay said.

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Voice of Experience: Kim Taylor, President, CME Clearing

Kim TaylorThis week The Glass Hammer is profiling successful women in the derivatives industry.

By Jessica Titlebaum

Kim Taylor, President of CME Clearing, said that the automobile industry is to Detroit what the futures industry is to Chicago. Taylor moved to Chicago from the Detroit area to work for Sprint, managing 25 telemarketers. One year later when the firm moved her function to Kansas City, Taylor started looking at job ads in the Chicago Tribune.

Taylor received two offers: one was for a newspaper called The Hammond Times, and the other was for a senior analyst position at the Chicago Mercantile Exchange (CME Group). The Hammond Times position was a better opportunity, she said.

“The other job was a management position and had a better salary. However, I liked the people that I met at the CME and felt like I would be a better fit there,” Taylor said.

She also got positive feedback from her roommate at the time.

“My roommate had heard good things about the CME and felt like the derivatives industry was going to take off,” Taylor said. “This was before people had the Internet and it was harder to research a firm. I had to go on what my friend was telling me and she said this was a growing, local business.”

Leader in Training
Taylor joined the CME Group in 1989 as a senior analyst in the Business Development Group (BDG), an internal consulting group within the Exchange. Working under one of her mentors, former BDG vice president John McPartland, Taylor’s team vetted new technology and services at the Exchange’s clearinghouse.

Under McPartland, Taylor co-authored a white paper for the U.S. Congressional Office of Technology Assessment that correctly predicted the impact 24-hour trading would have on clearing and settlement systems. This alerted Central Banks to modify their respective payment systems to better accommodate a global 24-hour trading environment.

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Voice of Experience: Veronica Augustsson, CEO, Cinnober

Veronica AugustssonThis week The Glass Hammer is profiling successful women in the derivatives industry.

By Jessica Titlebaum

In just 12 years, Veronica Augustsson went from developer to CEO of Sweden’s Cinnober, an international independent software company delivering trading, clearing, and surveillance solutions.

After graduating from The Royal Institute of Technology in Stockholm with a master’s degree in computer engineering, Augustsson began her career at Cinnober. Soon, she moved from developer into a technical sales support role and worked on a variety of projects in this position. She also spent 14 months in New York as onsite support at the American Stock Exchange (AMEX).

“I am very lucky to have the experience in New York because it is a big financial center,” Augustsson said. “While working on the AMEX trading floor, I was able to learn the rationale behind the trading.”

One of Augustsson’s biggest projects as an architect and developer was the trading system that Cinnober built for Turquoise, a European hybrid system launched by a conglomerate of banks to coordinate on and off exchange traded derivatives clearing.

Technology & the Derivatives Industry
The derivatives industry is quickly evolving because of Dodd Frank regulation, which among other things, has pushed off exchange-traded derivatives, also known as over the counter (OTC) contracts, on to exchange platforms.

Augustsson believes people with technology skills should get involved with regulatory matters.

“Technology is the driver and for the derivatives industry, it means there are no limitations,” she said. “My concern is that the regulators don’t know enough about technology so they sometimes make the wrong decisions when writing rules. I think the technology-skilled people need to be involved in regulation as well. Why, for example, is risk in real time not a requirement in many markets? Why is there not a discussion around real-time settlement?”

With the knowledge to ask the tough questions and the guts to start an industry discussion, it is no wonder Augustsson was able to climb the ladder at Cinnober. She was promoted to head of sales in January 2012 and offered the role of CEO just 10 months later.

Practice Makes Perfect
One of the factors Augustsson credits to her career success is that she played a variety of sports from the time she was four-years-old. Handball, which she played for 20 years, was her favorite.

“You have to understand the game and always be one step ahead,” she said. “I had very good split vision.”

According to the CEO, there are a lot of similarities between sports and the office.

“You learn the value of team work, how to give and take feedback on performance. Nowadays people often ask if I work a lot of over time. I just see it as I’m practicing,” she said.

Women in Tech Stand Out
While we’ve all heard about the challenges of being a woman in a male-dominated industry, with the tech industry being painted in a particularly harsh light, Augustsson asserts that being a woman in the male-dominated tech industry actually worked to her advantage.

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Voice of Experience: Ann Gonzalez, Director, Financial Services Advisory Group, PwC US

Ann GonzalesThis week The Glass Hammer is profiling successful women in the derivatives industry.

By Tina Vasquez, Managing Editor

Ann Gonzalez, a director in PwC’s financial services advisory group, says that thus far, her career has been “exciting, ever-evolving, and unexpected,” with one opportunity leading to the next.

“If anyone had told me when I started out over 15-years ago that I would be helping banks respond to derivatives regulatory reform, I would have never believed them,” Gonzalez said. “OTC Derivatives was a new field to me at the time and the industry has since continued its rapid rate of change. This near constant change has kept me very much engaged.”

The director began her career as a finance controller at the Depository Trust & Clearing Corp (DTCC) when it was incubating DerivSERV. When the business request for FP&A support was made, Gonzalez says she immediately raised her hand and was soon contributing to building its business case and later monitoring its financials.

“This role enabled me to learn all aspects of the business and the industry while contributing to building a business,” Gonzalez said. “I later switched to the business line and held a series of operations, client management, and product management roles, all of which I learned and developed significantly from. My time with Deriv/SERV was like catching lightening in a bottle, an incredible experience with an amazing team.”

One of Gonzalez’ proudest career achievements thus far was being nominated to participate in PwC’s Breakthrough Leadership, which is a conference for the highest performing women directors at PwC. It’s an elite group to contribute to and learn from, Gonzalez says.

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Voice of Experience: Yvonne Downs, COO Futures Division, Jefferies & Co., Inc.

YvonneDownsThis week The Glass Hammer is profiling successful women in the derivatives industry.

By Tina Vasquez, Managing Editor

Yvonne Downs is COO of Jefferies LLC futures division, though her 30-year long career in the futures industry began after she graduated from college and began looking for a job in accounting/finance.

“A friend suggested I consider joining the Chicago Board of Trade in their compliance department auditing firms who were users of the futures markets. I went to the interview and found that it was a fast-paced business that was in a constant state of change. I was hooked immediately,” Downs said.

The COO says that when she entered the industry, it required making decisions quickly, having a deep knowledge of the intricacies of business process, a strong financial background, and a strong sense of one’s self.

At the Chicago Board of Trade, Downs worked her way through all aspects of the Exchange business, from working on accounting for the futures business, financial analysis, trade practices, to looking at how trading and settlement occurred and assisting in the development of new products and services for the Exchange. Downs became SVP and ultimately oversaw the compliance/enforcement activities, coordinated with the Clearing Corporation, and worked with the executive committee and board of directors on strategic and governance issues.

Downs has also managed compliance efforts at top global brokerage firms, leading the effort to develop global compliance programs during periods of expansion in what Downs says was the “fast-paced and quickly evolving world of derivatives trading.”

“I am most proud of being able to be successful on both sides of the futures business, on the compliance side and on the revenue generating side,” Downs said. “It means that I have been able to strike the balance between ensuring that things are done with the best interests of all participants: the customers, the employees, and the firm.”

Developing Relationships
Before starting her career, Downs says she wish she would have understood the importance of developing relationships.

“I was very focused on working hard to learn all the aspects of the business and I wish I had taken a bit more time to get to know my peers, colleagues, and leaders within the firms,” Downs said. “I have found that it is the relationships that you develop along the way that make you successful and are as important as your understanding of the business.”

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Voice of Experience: Christina McCaughey, Managing Director, Futures & OTC Clearing Sales, State Street Global Exchange

Christina McCaugheyThis week The Glass Hammer is profiling successful women in the derivatives industry.

By Tina Vasquez, Managing Editor

Christina McCaughey has had a storied career in the financial services industry, which has included being the go-to expert when futures trading began to migrate away from the floors onto the screen. She has worked for some of the industry’s biggest names across three countries and become a prominent figure in the derivatives industry, but it’s a career that she could have missed entirely.

McCaughey came from a family of engineers, so when it was time to enter college, engineering seemed like the clear choice. It didn’t take long for her to realize that engineering wasn’t for her. “I quickly wasn’t happy,” she laughed. After she decided to leave the field of study, McCaughey spent a semester taking only classes that interested her, including Econ 101. It led to a degree in the field – and a burning desire to work on Wall Street.

“I graduated in the early 90’s during a recession. I didn’t have an MBA. I was reading the newspaper every day and Wall Street sounded so dynamic and full of opportunity, but the question was how to get there,” the managing director said.

The key turned out to be an international program that required going to business school in Germany for a semester, followed by an internship with a Fortune 500 company in Germany. So enthused by the idea, McCaughey extended her education by a year just for the possibility of receiving an internship at Salomon Brothers (now Citigroup).

“I wanted it so badly and I believed this would be the opportunity to get my foot in the door. If I could just get in, I was confident I could prove myself,” McCaughey said. “I thought I would be there for six months tops; I ended up working for Salomon Brothers/Citigroup for over 11-years. It was the opportunity I needed, so I never looked back.”

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Voice of Experience: Lynn Martin, CEO, NYSE Liffe U.S. and New York Portfolio Clearing

Lynn MartinThis week The Glass Hammer is profiling successful women in the derivatives industry.

By Jessica Titlebaum

Lynn Martin’s father played a large part in getting her to where she is now. As an engineer, he worked long hours and six day weeks, but always made it home in time for family dinner. Following in his footsteps, Martin pursued a career in computer engineering. After graduating magna cum laude from Manhattan College with a BS in Computer Science, she worked full time at IBM and went to graduate school at Columbia University for Mathematical Finance.

“I did not have the usual programmer personality,” Martin said. “I have a very quantitative mind, but I had no idea what I wanted to do. During grad school, I interviewed everywhere, from quant desks at banks to law firms specializing in IP litigation.”

Martin first heard about the London International Financial Futures Exchange (Liffe) in her coursework at Columbia when studying financial modeling, which is also how she came across Euribor. Short for the “Euro Interbank Offered Rate”, the average interest rate that European banks borrow funds from one another at, the Euribor was an important reference rate in the European money market.

“Around the time I completed my master’s coursework, I heard about a business development position at Liffe in New York,” Martin said. “They were looking for someone with a technology background to connect users in the US to their newly-launched electronic platform. I only had a cursory level of knowledge of the products they traded.”

Emerging Woman in Derivatives
As an emerging woman in derivatives, Martin was hired at just 25-years-old as vice president of Liffe to build the distribution of the LIFFE CONNECT platform in the United States. With a large responsibility at a growing new company, Martin learned quickly that you need to “know what you don’t know.”

“Any time you walk into a new job thinking you know everything about that job or company, you are doing yourself and the company a disservice,” she said. “Every company has subject matter experts. Ask them questions when you are unsure about a topic. Most importantly, though, treat the subject matter experts with the respect they deserve.”

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Thought Leaders: Donna Parisi on the Derivatives Industry

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Donna ParisiDonna Parisi, a Partner at global law firm Shearman & Sterling, recently sat down with theglasshammer.com to share her thoughts on the future of the derivatives industry. Donna was profiled on the site in 2010 when she participated in our “Top Women on the Buyside” management event, which she will be chairing again this year. Since 2010, Parisi has assumed the roles of co-head of Shearman & Sterling’s Asset Management Group and head of the Derivatives and Structured Products team. Over the past few years, Donna has been focusing on financial regulatory reform matters. At London’s Chatham House Conference on Global Financial Markets on March 17, Parisi will be discussing cross border derivatives harmonization.

The Glass Hammer: What is the outlook like for the derivatives industry at large?

Donna Parisi: The OTC derivatives industry, which has only been around for about 30 years, has constantly innovated and I believe will continue to do so. Over time products become commoditized and profits compressed, but new products have been introduced to meet customer and market demand. The inherent power and beauty of a derivative instrument is the ability to link it to an unending supply of asset classes limited only by a financial professional’s creativity. I believe the outlook is bright – different from what it has been in the past – but one of opportunity.

TGH: What impact does the most recent regulation have on the industry?

DP: The three central tenets of Dodd-Frank are improving transparency, mitigating systemic risk and protecting against market abuse. The regulations attempt to improve transparency in what has been called an “opaque” derivatives market by requiring exchange trading of more liquid derivatives instruments and requiring reporting of all derivatives transactions. Systemic risk is addressed by requiring liquid derivatives transactions to be centrally cleared and providing for higher margin requirements for uncleared instruments. Registration and regulation of major market participants such as swap dealers are intended to prevent market abuse and give regulators greater enforcement powers. Both the sell side and buy side are well past debating the need for or efficacy of new regulations and instead are fully focused on implementation and getting back to business. One major implementation challenge is compliance with regulations across multiple jurisdictions that are substantively similar as a policy matter, but differ in the details, presenting compliance complexities in what is a global marketplace. Related to this is the need for major infrastructure build-outs, including on unrealistic timeframes imposed by regulators on the technology side.

TGH: What do you think is keeping senior execs in derivatives up at night?

DP: What worries senior industry professionals are liquidity and capital. A perhaps unintended consequence of the new regulations has been fractured pools of liquidity largely resulting from cross-border issues such as broad extraterritorial scope, differing regulatory implementation timelines and a lack of mutual recognition of regulatory schemes in other jurisdictions. What does this fractured liquidity mean for the market? Who will the winners and losers be? What will be the impact on pricing and spreads? In some ways, capital considerations instead of regulatory requirements are driving business decisions. What capital is needed to support my business, and do my returns justify this allocation? I expect that in the next few years banks will be scaling back or even abandoning more capital-intensive businesses, perhaps creating opportunities for other credit intermediaries.

By Nicki Gilmour, CEO theglasshammer.com

This week The Glass Hammer is profiling successful women in the derivatives industry.

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The Derivatives Industry in 2014: Adapting to Change & Creating New Opportunities

Overhead view of office staffBy Nicki Gilmour and Jessica Titlebaum

Starting today and running until the end of the month, the Glass Hammer will profile women that have immensely impacted the derivatives industry. We have women running exchanges, clearinghouses, and technology firms that have not only influenced the industry’s operations, but have paved the way for other women to leverage opportunities in derivatives by becoming mentors and sponsors.

In the past 20-years, the derivatives industry has transitioned from floor-based operations with a plethora of players to electronic executions with just a handful of major players as a result of countless mergers. The industry is constantly moving, evolving, and maturing. Due to its global reach, there is always a market to trade and a regulatory requirement to explore, no matter what time of day it is. With a heavy emphasis on technology and speed, the derivatives industry truly understands the concept of leading edge. However, these aren’t the only areas where leaders have emerged.

CBOE Executive Vice President, General Counsel, and Corporate Secretary, Joanne Moffic-Silver, says this is a critical time for derivatives markets.

“Our industry faces many challenges: an uncertain and still evolving regulatory landscape, an increasingly global marketplace that transcends borders, the relentless march of technology, and a host of other developments,” Moffic-Silver said. “In the U.S., new Fed Chair Janet Yellen and new SEC Chair Mary Jo White will lend strong leadership to the industry as we address these challenges. Both are infinitely qualified and, I expect, will do a terrific job in their respective roles.”

Moffic-Silver says that moving forward, the industry’s continuous efforts to refine market structure will remain front and center.

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Men as Allies

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iStock_000006954519XSmallBy Jarod Cerf

In a piece by Maria Shriver called “The Unfinished Revolution” for Time Magazine, a man was quoted as saying, “We haven’t thrown some switch to go from a man’s world to a woman’s world. It’s more like we’re finally, for the first time, in a position where it’s no longer only a man’s world. Now what does that mean?” In just a few words, he was able to articulate the question that is lingering over every workplace: what does it mean that dynamics have shifted? And perhaps more importantly: how do we move forward?

Recent studies suggest that mixed gender alliances can be complicated and plagued with tension. The Sponsor Effect reported that low availability or unwillingness to follow through on promised support (31 percent), apparent sexual tension (30 percent), insufficient guidance (27 percent), and fear of talking openly about appearance (20 percent) greatly diminished the quality of women’s partnerships with senior male executives.

More telling is the reason the women sought out such alliances: 75 percent elected to have male sponsors for their “perceived influence and ability to leverage among their networks” vs. 18 percent for “knowing how to succeed.” As the researchers themselves attest, while women are generally adept at building long-term and supportive relationships, men are far more accustomed to converting those bonds into favors, opportunities, and trust-enforcing obligations.

This style of leveraging or converting social bonds, however, often seems distasteful—if not altogether secondary—when compared to deeds and merits. This sentiment was echoed strongly by respondents featured in Catalyst’s “The Pipeline’s Broken Promise”, one of whom stated that “Women need to get more assertive” regarding rewards and compensation. “If it doesn’t come to you, ask for it. Men do,” she continued.

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