Buy-side firms face many of the same challenges as sell-side firms managing fees, commissions and brokerage, according to Nick Solinger, President and CEO of FIA Tech.
“Today many buy-side firms receive invoices in varying formats from their Executing Brokers, which they then need to reconcile against their own trades and rate schedules,” he said.
“This process can be very manual, and a single trade dispute can hold up an entire payment sometimes for months,” he told Traders Magazine.
On October 4, FIA Tech opened its settlement platform Atlantis to buy-side market participants for the first time.
Atlantis facilitates the calculation, invoicing and payment of brokerage fees to executing brokers.
It is the industry standard brokerage payment platform and processes more than 170 million trades per year.
Historically, Atlantis facilitated brokerage payments from clearing brokers to executing brokers, but now offers clients the ability to manage execution brokerage payments directly.
The brokerage platform Atlantis was launched in 2017, and the main focus was settling brokerage for clients who use their clearing firms to pay execution brokerage on their behalf, Solinger explained.
Today, 45 brokers settle across 34 clearing houses (with all global ETD markets enabled for settlement) and enjoy a 30-day settlement rate as high as 99%, he said.
However, over 300-500 buy-side firms pay for execution directly to the broker, he added: “We’re now opening Atlantis up to clients which have this model of paying for execution so that they can enjoy the same benefits of automated and efficient brokerage settlement as clients which have clearing brokers paying on their behalf.”
Atlantis consumes data from various trade sources (clearing houses, interdealer brokers & other participants) and provides a standardized central means of processing brokerage invoicing, with high rates of automation with integrated workflows for reconciling fees and resolving disputes.
Atlantis has 45 institutions settling across 34 clearing houses with all global exchange traded derivative (ETD) markets enabled for settlement.
Solinger said that FIA Tech provides the buy-side firm and broker with a common, single view of trades across all global ETD markets to agree on fees and resolve any breaks on brokerage fees.
“Our platform automates both the brokerage calculation (as FIA Tech holds the golden-source rate schedule for most clients and brokers already) and the reconciliation of the buyside participants’ trades to the broker’s invoice,” he said.
The platform then streamlines the monthly payment process and provides an audit trail of payments made to brokers across 14 currencies globally, he added.
“Brokers and clients enjoy a settlement rate of up to 99%, eliminating much of the cost of resolving invoicing disputes and delayed payments,” he said.
According to Solinger, FIA Tech has a subscriber base of over 1,000 buy-side firms which use FIA Tech’s other products including reference data offerings, documentation solutions and regulatory reporting platforms.
“Based on data from our participating brokers, there are a vast number of trading firms which are reconciling and paying brokerage invoices directly (upwards of 500), and we are happy to offer an improved experience for their operations and finance teams,” he commented.
