ItaÃº Unibanco Asset Management, a Brazilian buy-side firm with US$128 billion assets under management, has selected software vendor Charles River to help it support algorithmic trading and reduce the errors associated with manual administration.
ItaÃº can access algorithmic strategies using the FIX financial messaging standard and use a single, consolidated order platform supplied by the Charles River investment management system to manage orders and engage in electronic trading. This includes the ability for ItaÃº's quantitative traders to use their own algorithms and high-frequency trading ideas for local executions. The multi-phased rollout of the system began in 2008.
The buy-side firm will connect to trading venues and sell-side counterparts using the vendor's connectivity network and link its own multi-market desks across the Latin American region so that trades can be executed from different countries via FIX. For example, an ItaÃº trader in Chile can now use FIX to execute trades on behalf of the firm in Brazil.
Prior to the implementation of the Charles River solution, traders at ItaÃº were required to manually input trades into spreadsheets and follow up with their brokers via phone.
According to Spiros Giannaros, vice president, Americas, Charles River Development, the increasing adoption of electronic trading tools by buy-side firms in Brazil represents a change in the mindset of traders in the Latin America region.
“Electronic trading has grown in Latin America, but the vast majority of growth has so far come from foreign investors,” Giannaros told theTRADEnews.com. “This was primarily because local brokers were not technologically equipped to handle electronic order flow and buy-side firms in the region were used to managing broker-dealer relationships. There has been a recent push to educate local firms about the benefits of electronic trading, which has spurred firms like ItaÃº to develop their execution capabilities.”
The use of electronic infrastructure by the buy-side will accelerate the growth of vendor and broker offerings in Brazil Giannaros adds.
“Brokers will now have to start being more competitive, for example by developing region-specific algorithms in conjunction with local buy-side firms,” he said. “Technology vendors like Charles River are investing heavily in the region in anticipation of buy-side demand and we expect the growth of electronic trading to be exponential in the coming years.”
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