The culture of “RBC nice” is paying dividends for Canada’s second-biggest bank.
Royal Bank of Canada has become the standard-bearer for a revolt among investors against so-called predatory high-frequency trading practices on both Wall Street and Canada’s Bay Street.
The technology, ideas and personnel behind the upstart IEX Group Inc. alternative stock market in the U.S. and the proposed Aequitas Innovations Inc. exchange in Canada can be traced to Royal Bank, portrayed as an outsider on Wall Street in “Flash Boys,” Michael Lewis’s book exposing the U.S. market’s obsession with trading speed.
“Certainly our clients, as I look at our electronic trading numbers, are doing more business with us,” said Greg Mills, head of global equities at Royal Bank. “We have more requests for meetings, we have more people coming to us and saying ’Help us understand this problem again.’”
Royal Bank’s RBC Capital Markets unit spent years supporting Brad Katsuyama’s quest to understand the effects of high-frequency trading on Wall Street, ultimately developing software designed to protect against traders using speed as an advantage. Katsuyama, the protagonist of “Flash Boys,” left RBC to found IEX, which began trading in October, and Royal Bank has since publicly supported it.
‘RBC Nice’
Royal Bank has emerged as a leader against predatory high-frequency trading at a time of increasing scrutiny from both regulators and the public after the release of Lewis’s book, which claims the stock market is “rigged” against investors. The bank is described by Lewis as fostering an “RBC nice” culture with its “no asshole rule” on hiring.
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