Electronic trading platform NYFIX is introducing what it calls a “commission management programme” to enable buy-side firms to allocate commissions for trades executed via NYFIX to participating brokers as payment for research or other soft dollar services.
The move follows recent FINRA approval of the application by NYFIX's broker-dealer subsidiaries to offer Client Commission Arrangements (CCAs), or Commission Sharing Agreements (CSAs), to their buy-side customers. The NYFIX commission management programme will be available to customers of all NYFIX agency brokerage services, including Direct Market Access (or DMA), algorithms, and access to NYFIX Millennium ATS.
NYFIX says clients who sign up for the programme will be able to use NYFIX's trade execution services without having to sacrifice existing relationships with research providers. Later in the autumn NYFIX clients will also be able to manage their commission allocations online with tools that will include reporting as well as payments and regulatory guidance.
NYFIX says that each client will be provided with the ability to customize its accounts, allowing for the adjustment of parameters, including remittances, reports and budget forecasts, to best fit their individual needs.
NYFIX claims that online access to accounts will allow for "efficiency, faster bill payment, and easier invoice approval, along with the ability to direct CCA payments." Additionally, NYFIX will provide each client with a dedicated account representative.
"Increased demand for transparency related to commission allocation, coupled with rising trade volumes, an abundance of independent research, and the potential unbundling of research and execution costs, all indicate that the time is right for NYFIX to introduce this programme," say Zoe Boza, Senior Vice President of the Commission Management Group, NYFIX, Inc. "Because of our market position as a trusted provider of innovative service offerings, including some of the industry's most advanced trade automation tools and one of the industry's largest non-displayed pools of liquidity, NYFIX Millennium, our commission management programme provides the buy-side a highly efficient means for managing commission dollars while at the same time achieving best execution."