The buyside can now grade the performance of its brokers, evaluating how the services they provide-such as research, management access or execution-stand up to one another.
The ability to grade a broker comes amid a growing emphasis by the buyside on how to best pay its research bills, according to Instinet. Through agency-only broker Instinets existing commission management platform, Plazma, buyside users can set specific parameters for grading, such as comparing all brokers to one another, or only to its peer group, such as agency-only, boutique, international, etc. Once the data, which is usually collected as part of the broker vote process, is compiled and analyzed, a report card is generated and can be sent to the broker as part of a regular evaluation.
The new grading functionality is part of an upgrade to Instinets Plazma commission management system. It is available now and viewable through web browsers.
Another upgrade to Plazma is the T*Share credit aggregation program, which allows the buyside to direct all of its commission credits amassed at multiple brokers into a central repository. A buysiders brokers must be part of T*Shares into order to deposit an institutions credits. Instinet has signed up about 25 new brokers in the program in the last year, bringing the total number to about 160 globally. It has also added the ability to aggregate credits from fixed-income trades. Previously, only credits from equities and options trades could be aggregated.
Luke Mauro, global head of operations at Instinet, explained that having different and separate soft dollar and CCA/CSA balances is one of the biggest obstacles to managing and administering a commission budget.
Clients globally continue to embrace CSAs and CCAs, but as a consequence they often end up with half dozen or more open accounts, creating a significant logistical headache. T*Share helps institutions solve this administrative hassle without forcing them to sacrifice execution relationships with their preferred CSA brokers,” Mauro told Traders magazine. “And given the number of participants we now have in the program, we can accommodate virtually any setup a client might have.
