SunGard has launched a new transaction cost analysis (TCA) solution for foreign exchange trading to help its clients better understand the quality of FX execution.
While equity TCA has become a fairly widespread offering among brokers, others have sought to apply similar principles to non-equity products in order to differentiate their offerings.
SunGard said its FX TCA solution will give trader transparency over their FC trading with real-time pricing and transaction data available through a customisable data analysis toolkit delivered as a software as a service.
“Corporations, insurance companies, pension funds and asset managers know that the FX component of their trading performance is becoming more important to track and manage as investors seek alpha,” said Bob Santella, president of SunGard’s global trading business.
“As an independent provider of pricing data and analysis not tied to a particular execution venue or pricing source, SunGard is able to focus on helping organisations real-time performance of trading activities while providing clients with the flexibility to maintain their current broker relationships.”
With an absence of a central or regulated pricing venue, FX trading can be highly opaque, making it difficult for traders to ensure they have traded at the best price available.
However, with FX execution becoming unbundled from custody arrangements, SunGard says there is more attention now on the cost of execution. As such, real-time trading and pricing of FX risk have become more common and increased the demand for TCA that can evaluate performance throughout the trading day.
Another agency broker, ITG, has offered FX TCA for some time and a number of other sell-side firms and specialist TCA providers are expanding the scope of their TCA products to address an increased multi-asset class approach among buy-side desks.