Ross Lancaster

According to a recent Acuiti report, fixed income and equity derivatives specifically are asset classes where surveyed asset managers confirmed they commonly apply TCA. 

In addition, buy-side respondents also affirmed that TCA is increasingly being applied to commodities and listed and OTC fixed income derivatives. 

Ross Lancaster, head of research at Acuiti, said: “Over the past decade, TCA has gone from a retrospective, compliance-focused process to one in which valuable insights can be driven across the trade workflow. 

“As firms find more use cases for TCA, the need for high quality, real-time data also increases, which is causing challenges for some firms. However, for the firms that can achieve data quality across asset classes, there is significant value to be gained both in terms of trade optimisation as well as in alpha generation.” 

While 76% of the surveyed asset managers confirm that they use TCA for regulatory and compliance purposes, use cases for TCA continue to evolve with ever-more advanced and sophisticated applications gaining traction. 

Specifically, the whitepaper highlighted that in the last five years, 65% of respondents had increased the sophistication of their analysis of TCA data. 

While broker selection remained a key TCA focus, half of the asset managers responded that the technology is also being used for trade optimisation, while alpha creation was cited by around a third of firms. 

Looking ahead to future applications, increasingly embedded TCA within firms’ workflows appears to be within sight. As an example, Acuiti’s report highlighted that 87% of respondents recognised the importance of integrating TCA into OMS/EMS processes, despite less than half currently possessing that functionality.

Read more – Conscious usage of TCA: Making trade analytics more actionable

The whitepaper, ‘The growing sophistication of Transaction Cost Analysis’ was carried out by Acuiti in partnership with Abel Noser Solutions, a Trading Technologies company, surveying senior executives across 64 asset management firms globally.

Peter Weiler, executive vice president and managing director, data and analytics at Trading Technologies, said: “The findings in the study correlate with our own experience at Abel Noser and TT in which asset managers and other clients are looking to increase the applications of TCA across both asset classes and the trade lifecycle.”

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The deal is the second – and final – part of Trading Technologies’ acquisition of Abel Noser Solutions. 

The business closed the deal which saw it pick up Abel Noser’s buy-side TCA provider subsidiary back in August 2023. 

Read more: Trading Technologies to acquire Abel Noser’s buy-side TCA subsidiary

Speaking to The TRADE at the time the acquisitions were announced, Keith Todd, chief executive of Trading Technologies, explained: “TT enjoys a notable list of buy-side clients, but many of our relationships are through the sell-side. [bringing Abel Noser into the TT family] moves us closer than ever to the buy-side, giving us the opportunity to build on those relationships and also help our sell-side clients serve their buy-side customers with extraordinary new tools.”

Abel Noser Solutions is a global business with offices across: Boca Raton, London, Los Angeles, Metro DC, and New York.

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The partnership between TT and Hidden Road Partners CIV US – Hidden Road’s futures commission merchant – will allow Hidden Road clients to use the platform for trading across asset classes and products, including traditional cleared derivatives and digital assets.

“As Hidden Road continues to expand our product coverage – now including FX, cleared derivatives, OTC derivatives and synthetics, digital assets and more – offering our counterparties streamlined access to leading third-party technology is a logical extension of our strategy,” said Michael Higgins, global head of business development at Hidden Road.

“TT is recognised throughout the industry for its broad coverage and low latency, both of which align with Hidden Road’s modern approach to quantitatively driven credit intermediation and multi-asset prime brokerage.”

TT is the first independent platform that Hidden Road has made available to its clients for cleared derivatives.

“Like TT, Hidden Road is a fast-growing and trusted partner to institutional clients, and we’re very pleased to make our platform available to its wide base of clearing and prime brokerage customers,” said TT COO Justin Llewellyn-Jones.

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TT Futures TCA is a transaction cost analysis (TCA) tool made specifically for futures trading, leveraging futures market and trade data with a range of metrics and measures.

According to the firm, the new TCA for futures capability will enable users to choose from a range of customisable reports to analyse and improve their trading strategies while measuring the efficacy of their trading counterparties.

Meanwhile, TT Trade Surveillance – powered by the proprietary SCORE machine learning algorithm – combines new multi-asset coverage and new configurable models with the machine learning-driven models from the firm’s first-generation trade surveillance platform, TT Score.

Trading Technologies added that it plans to upgrade and shift all TT Score users to TT Trade Surveillance in H2 this year.

The firm’s trade surveillance capabilities are being expanded beyond listed derivatives to a larger range of asset classes, including equities and equity-adjacent subclasses, equity options, foreign exchange (FX) and fixed income.

“We are constantly in a mode of identifying opportunities that will enhance our clients’ experience, simplify their day-to-day operations, increase efficiencies and add value to the trade life cycle,” said Justin Llewellyn-Jones, chief operating officer at TT.

“The introduction of our new futures TCA and expanded multi-asset trade surveillance capabilities are the latest examples of how Trading Technologies and the TT platform play a pivotal role in the global financial markets.”

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Terms of the deal were not disclosed. It is expected to close at the end of February.

The deal builds on an existing strategic partnership announced by the pair in late 2022 and is designed to deliver a post-trade allocation service to the sell-side.

Following completion, ATEO will operate as a managed service hosted in TT’s data centres. Trading Technologies confirmed that the ATEO post-trade allocation engine is fully integrated into the TT order management system (OMS).

 “We’ve enjoyed an outstanding working relationship with the ATEO team since we embarked on our partnership in 2022, and we came to the conclusion that we can create an even stronger value proposition and end-to-end offering by bringing the entire firm and all software modules into the TT family of offerings,” said Trading Technologies CEO Keith Todd in a statement.

“ATEO has both highly respected technology and established trusted relationships with a wide range of leading banks, brokerage firms, trading houses and professional traders. The total addressable market for middle-office clearing solutions is at least $100 million, with plenty of room for growth in market share.”

Trading Technologies has made several acquisitions in recent years in a bid to grow inorganically and expand into new business lines. In August last year, the firm acquired Abel Noser’s buy-side TCA subsidiary.

It later announced in December plans to launch two new business lines – TT Compliance and TT Quantitative Trading Solutions (QTS) – to fuel growth for 2024 across asset classes.

“Giving our clients the ability to manage their trading activities from pre-trade risk to post-trade allocation and clearing through TT’s multi-asset platform will provide a meaningful competitive advantage,” said David Romeo, managing director of ATEO.

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The offerings build on existing strengths in trade surveillance, algo and quant trading solutions, leveraging the recent acquisitions of Abel Noser Solutions in August and RCM-X in March 2022.

Keith Todd, chief executive of TT, said: “Sound compliance and robust trade surveillance are must-haves and only growing in importance across asset classes as regulators around the globe are imposing significant fines and holding firms accountable for the actions of their people. We see a tremendous opportunity to both capture new business and provide a second line of defence for clients who already rely on our technology for their trading-related needs.”

TT Compliance is set to take from the TT Score trade surveillance offering, originally built for exchange-traded derivatives, as well as Abel Noser’s Compliance+ solution – primarily utilised for US equities. KRM22 – focused on risk management and capital markets – will also be used to extend the capabilities of TT Score and Compliance+ by building a new multi-asset class surveillance platform, expected in Q2 2024. 

The newly branded TT QTS will leverage its enhanced quant trading offering following the previous acquisition of RCM-X, including the introduction of TT Premium Order Types last year. It will also include the TT Strategy Studio as well as a new suite of quantitative solutions for fixed income trading, beginning with US Treasuries.

Technology from Abel Noser’s broker-neutral trade optimisation platform, START, is also set to be integrated as part of the new TT QTS business line.

The new units are part of the firm’s wider reorganisation into six distinct lines of business, aimed at supporting clients’ multi-asset needs. 

These include: TT Futures & Options, led by Alun Green; TT Fixed Income, led by Christopher Heffernan; TT FX, led by Tomo Tokuyama; TT Compliance, led by Ted Morgan; TT QTS, led by Joe Signorelli; and TT Data & TCA, led by Peter Weiler (Abel Noser Solutions chief executive, set to become EVP of Data & TCA on January 1).

Read more: Trading Technologies bolsters senior leadership team with three new additions

All business line leaders will report to Justin Llewellyn-Jones, appointed chief operating officer earlier this month.

Speaking to the name of the company, Todd explained: “We are calling the new business line QTS to underscore that our team is not just developers building algos. These professionals are experts in data science and analytics, along with trading and risk management in multiple asset classes, on top of their coding and development skills. We’re excited to further expand into new asset classes and bring our award-winning tools to a broader user base as we continue to grow our multi-asset offering.”

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Former head of market services and digital at Euronext, Eglantine Desautel, has been selected to head up the European consolidated tape efforts. Desautel has been selected as chief executive officer of EuroCTP – the European initiative to establish a consolidated tape in Europe. Desautel takes up the role after over a decade with Euronext, serving most recently as its head of market services and digital, as well as previously serving as head of its Optiq programme. She originally joined NYSE Euronext in 2011 as its deputy chief of staff to the president and deputy chief executive.

Adrian Ip has been named chief strategy officer at Aquis Exchange, having most recently served as managing director at Aquis Technologies. Ip joined the exchange back in 2017, initially as director of product management & technology sales – a role he held until May 2022. He has previously held senior roles across various businesses, including: Wccftech, FireDrake Consulting, Thomson Reuters, and Horizon Software.

Trading Technologies (TT) made three new appointments to its senior leadership team, including chief operating officer; executive vice president of fixed income; and executive vice president of futures and options – all of which will join the firm on 1 January 2024. Justin Llewellyn-Jones has been appointed chief operating officer, joining from Broadridge where he most recently served as chief product officer and head of capital markets, North America (equities, FX and derivatives). Meanwhile, Christopher Heffernan has been appointed executive vice president of fixed income, bringing over two decades worth of experience in fixed income sales and trading, business development and leadership roles. Heffernan will join from Flow Traders, where he has been head of fixed income sales since 2019. Elsewhere, Alun Green will join TT as executive vice president of futures and options, responsible for expanding the firm’s core futures and options franchise. Green joins from Fidelity Information Service (FIS), where he served as managing director, derivatives utility for the past eight years, following the firm’s acquisition of SunGard in 2015.

Dariush Mirfendereski has been appointed head of inflation trading as part of MUFG’s rates trading team. In his new role, he will be responsible for “enhancing overall product capability and expanding MUFG’s financial institutions business with a focus on distributing risk to end users”. Mirfendereski has an extensive career history in the inflation trading sphere and joins MUFG after most recently heading up the division globally at HSBC for nearly 10 years until 2022. Previously he spent seven and a half years at UBS Investment Bank as global head of inflation linked trading and eight years at Barclays as head of inflation derivatives trading.

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Justin Llewellyn-Jones has been appointed chief operating officer (COO), joining from Broadridge where he most recently served as chief product officer and head of capital markets, North America (equities, FX and derivatives).

Elsewhere in his career, Llewellyn-Jones served as global head of derivatives at ION after over 14 years with Fidessa, which was acquired by ION in 2018.

While at Fidessa, he served as global head of derivatives for over six years and COO Americas for more than eight years.

As part of his new role at TT, Llewellyn-Jones will be responsible for the firm’s market-facing business to drive its multi-asset growth, alongside the heads of each business line.

Meanwhile, Christopher Heffernan has been appointed executive vice president of fixed income, bringing over two decades worth of experience in fixed income sales and trading, business development and leadership roles.

Heffernan will join from Flow Traders, where he has been head of fixed income sales since 2019.

Prior to that, Heffernan served at SumRidge Partners, initially as one of the original founding employees and later becoming director of institutional sales.

Heffernan began his career at Morgan Stanley in 2001, where he served as vice president in fixed income for more than eight years, with roles on both the sales and trading desks.

At TT, he is set to focus on building the firm’s global fixed income business.

Elsewhere, Alun Green will join TT as executive vice president of futures and options, responsible for expanding the firm’s core futures and options franchise.

Green joins from Fidelity Information Service (FIS), where he served as managing director, derivatives utility for the past eight years, following the firm’s acquisition of SunGard in 2015.

He also previously served as executive vice president and head of strategy, post-trade derivatives and securities at FIS.

While at SunGard, Green held multiple roles including senior vice president, global head of operations, as well as, executive vice president, deputy head, derivatives utility prior to the FIS acquisition.

Keith Todd, chief executive of TT, said: “As we continue to grow into new asset classes and significantly broaden our appeal to the buy-side, we have been steadily fortifying our leadership team – as well as subject matter experts within each of our newly aligned business lines – with seasoned professionals to ensure we have all the building blocks in place to achieve our ambitious goals.

“Justin, Chris and Alun bring to the team a wealth of talent, skills, experience and deep relationships, and we’re thrilled to have them join TT in the new year.”

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Over the last year, these providers have continued to facilitate progress and innovation in the marketplace, focused on enhancing workflows and aiding the market in its ever-present pursuit of increased efficiency. The range of updates to their respective product suites and expansions into new markets makes for a strong cross-section of award nominees.

Among the key players in this competitive landscape, The TRADE has selected BlackRock’s Aladdin, Bloomberg, Broadridge Trading and Connectivity Solutions, and Trading Technologies for the 2023 shortlist, following various individual achievements over the last 12 months.

BlackRock, Aladdin

Throughout the last year, buy-side heavyweight BlackRock’s flagship order and execution management system (OEMS), Aladdin, has undergone a series of developments, enhancing the risk management-focused electronic system.  The tech platform manages whole portfolios across both public and private markets investments. Aladdin technology addresses analytics, trading, risk management, operations, and accounting and performance, and at its core is focused on a data processing pipeline, understanding what differentiates a client and therefore providing efficient solutions. 

Last December, BlackRock expanded Aladdin’s bonds trading capabilities with the integration of Tradeweb. The multi-year partnership was focused on delivering a “unique trading experience” between BlackRock and Tradeweb, focused on corporate, municipal, and emerging markets bonds. Over the course of a number of years the roadmap will deliver innovations provided by Tradeweb to Aladdin users, beginning with Tradeweb’s AiPrice. In the first phase of the project, Aladdin users will gain access to real-time prices for around 25,000 corporate bonds using the service.

In July, Broadridge’s LTX entered the next phase of its BlackRock partnership through an integration with Aladdin, which allows Aladdin users to now leverage data-driven capabilities to improve liquidity discovery and trading efficiency. The pair’s multi-year partnership incorporates LTX’s Liquidity Cloud and actionable pre-trade cloud match scores directly in the Aladdin platform. Most recently, in September, BlackRock expanded Aladdin’s team with the appointment of a new expert in a solutions engineering role. The former FlexTrade buy-side order management system (OMS) specialist, Federico Grasso, is now vice president in engineering solutions. 

Bloomberg

Bloomberg has made significant strides over the last 12 months, updating its offering in various areas. In Q2 this year, Bloomberg and S&P Global Market Intelligence launched a new solution to streamline syndicated primary bond market workflows, set to minimise the need for proprietary mapping and manual tracking of security information. Following this, Bloomberg completed its acquisition of Broadway Technology, aimed at providing a low latency execution management offering, optimised for rates trading, and deliver improved innovations in multi-asset software. In February, Bloomberg enhanced automated trading solutions to strengthen client execution, introducing a range of enhancements to its Rule Builder (RBLD) solution.

Bloomberg’s order management system (OMS) AIM and its risk and reporting PORT Enterprise solutions are key offerings. In May, Swedish independent fund management company Lannebo Fonder became the latest buy-side to adopt both Bloomberg’s AIM and PORT solutions. Bloomberg’s PORT Enterprise is the expanded version of its PORT solution, which delivers reporting capabilities powered by risk models alongside centrally administered batch reporting services. The AIM solution has seen increased popularity with the sell-side, with BNP Paribas’ securities services business integrating with Bloomberg the same month to bring together its multi-asset servicing capabilities with the order management system. Also in May, BNP Paribas’ securities services business was integrated with Bloomberg to bring together its multi-asset servicing capabilities with Bloomberg AIM. The integration was aimed at providing mutual clients with front-to-back workflows and standardised data connectivity to support efficient trade management.

More recently, in September, Bloomberg launched the new MVP index and pricing power index, adding to Bloomberg Index Services (BISL) suite of thematic equities indices. The offering tracks the performance of US large-cap companies that showcase fundamental qualities across momentum, value, volatility and profitability based on a factor model developed by Bloomberg Intelligence. In October, Bloomberg launched a new portfolio manager workspace in a bid to enhance its buy-side decision support solution. The interactive offering is focused on supporting decision-making processes through streamlining the link between analysis and portfolio implementation, combining real-time portfolio exposures with market data, portfolio construction, sophisticated risk analytics, and real-time liquidity insights.

Broadridge Trading and Connectivity Solutions 

Broadridge Trading and Connectivity Solutions has had a stellar year with notable developments across its business. Its middle-office solution is a front-and-back-office agnostic SaaS solution that provides firms with the ability to achieve operational efficiency and cost effectiveness. 

In February, Broadridge Financial Solutions partnered with analytics solution provider Point Focal to offer clients improved access to portfolio analytics and alternative data driven quantitative insights. The move allows for Point Focal’s insights to be incorporated into Broadridge’s order-routing network platform, NYFIX, providing automated reports which combine data, visual analytics and natural language processing to expose signals to improve single stock and portfolio performance while de-risking exposure. The post-trade solution facilitates intraday allocations and improves post-trade processing, while mitigating end-of-day risk. In October, Broadridge Financial Solutions launched a new solution designed to meet the needs of asset managers with high volume and/or high-touch orders named NYFIX Fill Matching. The FIX based real-time reconciliation product compliments the NYFIX Matching solution.

The same month, Broadridge entered into a strategic partnership with Iress UK, incorporating its OMS and market-making platform, Tbricks directly into the Iress Retail Service Provider (RSP) network. Through the partnership, liquidity providers benefit from more streamlined order management, increased market connectivity, real time data and analytics, and robust compliance. Most recently, Broadridge Financial Solutions and Tokyo Stock Exchange (TSE) launched a new direct connection, between TSE’s ETF trading platform, CONNEQTOR, and Broadridge’s EMS, Xilix. 

Trading Technologies 

Trading Technologies (TT) has gone from strength to strength over the last year, enhancing its global capital markets technology platform offering. The provider’s Software-as-a-Service (SaaS) TT platform connects to the world’s major international exchanges and liquidity venues in listed derivatives–alongside a growing number of asset classes, including fixed income, foreign exchange and cryptocurrencies. The platform delivers advanced tools for trade execution and order management, market data solutions, analytics, trade surveillance, risk management and infrastructure services to the world’s leading sell-side institutions, buy-side firms and exchanges. In 2022, the ultra-low latency TT platform handled two billion transactions.

In February, TT and Eurex entered into a partnership to offer EnLight through TT platform, set to help reduce the time-to-market of price discovery from various participants, making use of TT’s large distribution network. In March this year, it acquired London-based fixed income trading solutions provider, AxeTrading, providing TT with an immediate fixed income offering. The acquisition supported its multi-asset expansion, in particular into fixed income, giving the business access to much of the fixed income markets for the first time including coverage of corporate, government, municipal and emerging market bonds as well as over the counter (OTC) interest rate swaps.

In June, it established TT FX, a new foreign exchange business unit named TT FX, the initial implementation phase is scheduled for late this year. Following this, in September, TT acquired Abel Noser Solutions–the industry-leading provider of transaction cost analysis (TCA) for investment managers, brokers, asset owners and consultants. Analytics from Abel Noser Solutions are expected to be integrated into TT’s platform at a later stage.

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A report by Acuiti, commissioned by Trading Technologies, found that trading in APAC holds significant potential for firms if challenges unique to markets within the region can be overcome.

Overall, 37% of respondents said that trading in APAC markets was more profitable than trading in Europe, with just under a third of hedge funds noting that the profitability of their trading strategies was significantly higher in APAC than in Europe.

However, although the region presents significant profitability, various challenges exist for European firms trading markets across the region.

Among the challenges, more than half of respondents cited finding the right local partners when required as the most challenges aspect of trading APAC markets.

Other major challenges included understanding local rules and regulations as well as gaining access to regional derivatives markets via their preferred clearing firm.

“APAC is the fastest growing region for listed derivatives trading volumes, and that is fuelling interest in trading in the region among European proprietary trading firms and hedge funds,” said Will Mitting, founder and managing director at Acuiti.

“At the same time, many exchanges have invested in technology and processes designed to make it easier for international trading firms to connect and trade. This is creating a virtuous circle of growth that is set to continue.”

Understanding exchange rules and risk management requirements were found to be the least challenging aspects of trading APAC, with less than 20% of respondents citing these as an issue, respectively.

Elsewhere, technology requirements were lower down the list of challenges, given substantial investments made by third-party front office vendors over the past decade to expand connectivity to exchanges in APAC. This has resulted in reduced cost of entry for clients when engaging in new markets.

“Trading Technologies has long recognised the tremendous trading opportunities in the APAC region. This study clearly demonstrates that these opportunities have only grown,” said Keith Todd, chief executive of Trading Technologies. 

“European hedge funds and proprietary trading firms are among those poised to benefit as they learn more about how to navigate some country-specific challenges through education and the right partnerships.”

Earlier this year, a separate Acuiti report found that trading firms are increasingly looking to diversify their trading strategies through entry to new markets, with over half of respondents confirming definite plans to expand to new regions within the next three years.

From the list of respondents, 76% were found to be looking to expand to Asia – with Taiwan specifically top of the priority list, while 67% expressed that South America is a region of focus.

Read more: More than two thirds of traders are looking to diversify through Asia and South America expansion

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