Broker-to-Broker Matching: Plus Ça Change…
Report Summary
Broker-to-Broker Matching: Plus Ça Change…
The more things change, the more things stay the same … especially when it comes to broker-to-broker trade confirmation matching.
London, 23 January 2013 – A new report from Aite Group evaluates the trade confirmation process between brokerage firms that buy and sell for their institutional clients. Based on Aite Group interviews with 15 brokerage firms and data collected on 46 firms during Q4 2012, this report evaluates the level of automation versus manual labor involved in the trade confirmation process, considers various messaging formats, and compares U.S. and European market practices. The report is intended to serve as a benchmark for brokerage firms and vendors that have an interest in the broker-to-broker matching space.
Evolving regulation and the poor economic climate are squeezing investment in the post-trade operations space, especially in terms of headcount. While brokers must contend with many market factors, they lack budget to spend on much-needed improvements to the communication process between selling and buying brokers. Transparency requirements are also burdening firms that rely on manual processes for trade confirmation—a significant percentage of the market.
“Brokerage firms are under a lot of pressure from clients and regulators to improve operational processes, and increased regulation is causing severe budget cuts in non-core business areas,” says Virginie O’Shea, analyst with Aite Group and author of this report. “Given that broker-to-broker matching is widely considered to be a non-core cost center, it is unlikely to see an increase in C-level support. Some top-tier firms are investing in electronic trade matching, but many more need to follow suit.”
This 35-page Impact Report contains 17 figures and two tables. Clients of Aite Group’s Institutional Securities & Investments service can download the report.