FlexTrade has developed its own algo wheel for the systematic selection of algorithms and brokers to help firms meet MiFID II’s best execution requirements.
Known as FlexAlgoWheel, the tool uses a data driven interface alongside real-time internal and external inputs and transaction cost analysis (TCA) to improve broker and algo selection processes.
Buy-side firms will be able to configure a systematic and quantifiable decision matrix which is fully transparent and consistent with best execution, FlexTrade said.
Vijay Kedia, CEO at FlexTrade, explained an important, yet repetitive role of any trader is to select the right broker and algorithm based on a multitude of factors.
“Firm-wide, data-driven, unbiased consistency in the algorithm selection criteria will become the norm,” Kedia added.
The algo wheel is fast becoming a crucial tool for buy-side firms, as MiFID II forces execution strategies under greater scrutiny.
Speaking to The TRADE earlier this year about ITG’s algo wheel, Rob Boardman, CEO of ITG Europe, explained the tool “creates a new process to produce a lot of performance data which is fair and objective and so it gives an unbiased result.
“It also provides the answer to compliance, internal audit or even customers. That truly is best execution.”
FlexAlgoWheel is available through FlexTrade’s multi-asset execution management system and is currently being implemented by several buy-side firms that use more than 200 brokers.