Bloomberg Tradebook, a wholly owned agency broker of Bloomberg L.P., is the latest broker to refocus its electronic trading to address buy-side traders’ execution obligations by reforming its agency model with the introduction of OPTX, a new tool to ensure best execution on buy-side trading desks.
Though most say that they are adapting to demand from institutional investors, the new proposition aims to meet evolving regulations which obligate the buy-side to prove best execution to their clients across multiple asset classes. It’s no longer enough to send an execution off to a broker and know that it had slippage of a couple of basis points. This has broadened the scope of reporting and triggered changes in front-end trading technology to stay on top of regulations.
In the meantime, OPTX provides more transparency to investors in terms of execution strategy through its new technology that responds to real-time data and dynamically re-routing between different strategies and counterparties to prove best execution in terms of venue selection.
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Buy-side transparency challenge
As such, buy side firms can utilize the OPTX system, which was applied to Bloomberg Tradebook’s equities and options offerings in the United States, to capture, store and analyze these data points as part of proving best execution. Moreover, it provides clients with a single platform that utilizes quantitative data models and analytic-driven selection to route orders to a suite of destinations.
Commenting on the reasoning behind the new service, Glenn Lesko, CEO and President at Bloomberg Tradebook, said: “Optimizing the execution process is critical to creating a competitive return for asset managers. OPTX is addressing some of our clients’ greatest concerns by reforming the agency execution model and adapting to market changes.”
OPTX also encompasses Bloomberg Tradebook’s proprietary liquidity-seeking strategies, such as B-Dark, B-Smart and ETF RFQ, as well as the portfolio algorithm and PAIR platform, which leverage data from Bloomberg functionality.
“Bloomberg Tradebook is singularly positioned to deliver this level of best execution, maximizing our agency execution model, unparalleled data and analytics capabilities, and extensive counterparty and global network connectivity,” added Lesko.