Outstanding TCA Provider
Bloomberg’s TCA remains to be one of the most used for equities amongst buy-siders in the market. It is MiFID II compliant and works cross asset multiple classes, including OTC derivatives, allowing users to demonstrate and monitor execution of orders. Research from Greenwich Associates earlier this year suggests Bloomberg’s TCA will grow significantly in both fixed income and FX as trades flowing through execution management systems begin to provide full transaction data for TCA.
ITG says its clients heavily use the consulting side of its TCA as many of them are taking analytics more seriously. It is used not just by trading desks, but compliance and even boards to send analytics to trustees or funds. In July, ITG launched a TCA for fixed income based on data from more than 10 million quotes and trades, including inter-dealer quotes, FINRA TRACE information and ECN executions.
ICE Data Services
ICE’s fixed income TCA has proved popular amongst buy-side firms, with T. Rowe Price recently announcing its decision to use ICE Data Services’ TCA to evaluate its trade execution quality for best execution. The exchange operator says the service and the technology allows users to see how their trades ‘stack up’, while offering greater transparency and helping customers meet expanding risk management and reporting needs.
Combining execution, algorithmic, venue and smart order router evaluation analytics, IHS Markit’s TCA provides users with insight to brokers and asset managers to improve execution quality management on trading desks. According to research from Greenwich Associates, IHS Markit’s TCA for equity trading is one of the most used in the industry this year.
Outstanding Global Exchange Group
The Chicago-based exchange operator has long been one of the most important players in the US derivatives space, but took things to a new level in 2017 with its acquisition of Bats Global Markets, including its substantial operations across multiple order books in both the US and Europe. Combining the two groups give each a major presence in the derivatives and equities trading space that they did not have alone, as well as a growing data and indexing business which could provide opportunities for new derivatives products on CBOE.
London Stock Exchange Group
Despite seeing its proposed merger with Deutsche Boerse scuppered by competition regulators, LSEG hasn’t let that dampen its growth plans. It was recently revealed to be one of the fastest growing exchange groups in the world and has continued to invest in its many trading platforms across derivatives, equities and dark trading.
No list of outstanding exchange groups would be complete without mentioning the biggest of them all, Intercontinental Exchange (ICE). The group has continued its growth trajectory this year buying Bank of America Merrill Lynch’s fixed income indices platform, giving it a significant new source of revenue in the lucrative index and market data sector. The exchange operator has also been one of the most vocal critics of the UK’s moves to leave the European Union and against regulatory creep in the securities industry.
The German exchange operator suffered in the wake of its proposed merger with LSE collapsing, though it remains a significant players both in Europe and globally. It has continued to grow its non-core businesses including its Eurex Clearing offering. It recently announced it would run a profit sharing scheme through its clearing business and has made numerous innovations including introducing a market-on-close service for futures to help clients hedge better.
Best Compliance Technology
As part of the post-trade business of NEX Group, Abide Financial has risen to prominence since the introduction of the Market Abuse Directive in the summer of 2016. Its post-trade risk mitigation and surveillance systems are crucial tools to try and stamp out market abuse at a time when regulators are taking a harder line on the issue. Its acquisition by NEX in October 2016 gives it additional clout.
With multiple offerings in the compliance space Cinnober has become an established vendor for all things post-trade, including trade reporting, market surveillance and clearing systems. Though its Boat subsidiary it has also been closely involved in the creation of TRADEcho, which aims to be a one-stop-shop for MiFID II reporting.
Another market surveillance provider in this category indicates the importance of this area of compliance following the introduction of the Market Abuse Directive last year. NICE has long been a major player in market surveillance and is now making advances into the world of artificial intelligence and machine learning to ensure its systems are able to keep up with the pace of change in this fast moving are of technology.
Upcoming rules on trade reporting in MiFID II means firms like RegTek.Solutions are set to grow significantly. RegTek has already received investment from major players including Deutsche Boerse to further develop its reporting, validation and reconciliation services.