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 availability to grade a broker comes amid a growing emphasis on the buyside on how to best pay its research bills, according to Instinet. Through the agency-only broker’s commission management platform, buyside users can set specific parameters for grading, such as comparing all brokers to one another, or only to its peer group-agency-only, etc. Once the data, 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 Instinet’s Plazma commission management system.
Another upgrade is the T*Share credit aggregation program, which allows the buyside to direct all its commission credits amassed at multiple brokers into a central repository. A buysider’s brokers must be part of T*Shares to deposit an institution’s credits.
Luke Mauro, global head of operations at Instinet, explained that having different and separate soft-dollar and CCA/CSA balances is a big obstacles to managing a commission budget.
“Clients globally continue to embrace CSAs/CCAs, but as a consequence they often end up with half a dozen or more open accounts, creating a logistical headache,” Mauro said. “T*Share helps institutions solve this hassle without forcing them to sacrifice execution relationships with their preferred CSA brokers.”
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