BNP Paribas has partnered with Switzerland-based Itarle Group to give its buy-side clients access to analytics on transaction costs.
“When we looked at all the vendors we could have partnered with, there is a few things that are actually very important to us,” says Jason Stipe, global product manager at BNP Paribas. ”One, we could provide an independent validation or transaction-cost analysis (TCA) to our clients. That was one of the first critical things for us. The second thing that was important to us was ease of distribution to our clients and Itarle already had that through their Vision platform. The third thing for us, probably the most important thing is, they are already recognized as one of the leading TCA providers in the equity space, and the partnership we did was basically to provide that in derivatives to them.”
Access to TCA will be provided through Itarle’s Vision platform, which was initially built to monitor the quality of executions that were being carried out on Itarle’s algorithmic trading platform. The partnership with BNP separates the execution process and the TCA process, allowing trades executed manually to be compared with those executed via algorithms.
With the revised Markets in Financial Instruments Directive, there has been a focus both on the quality of research and execution. The justification for choosing one particular broker or another is driven to a large degree by the quality of execution and having the right tools to demonstrate that, notes Tom Middleton, head of quantitative services at Itarle Group.
“We were selected by BNP as a firm that had a lot of experience in the equities space,” says Middleton. “So it is a question of transferring that same product to futures really. So from our perspective, it is a question of being able to drive a lot of the change that we have experienced in the equities markets in futures as well and help BNP prove that they are getting the execution quality that I am sure they are getting.”
Itarle was founded in 2005 and specializes in providing algorithmic and smart order routing (SRO) services in global equity and futures markets.
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