Waters Rankings 2016: Best TCA System Provider— IHS Markit

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Heather Hallack, Jennifer Theiss, Tim Kurkjian, David Weisberger, John Jannes, and Samantha Foerster

Anyone who has charted the inexorable rise of IHS Markit as it has evolved from a niche provider of daily credit default swap prices to one of the industry’s largest data and technology providers, founded by Lance Uggla and a handful of TD Securities swaps dealers back in 2003, will recognize that this monster is unlikely to stop grazing until it has a finger in every data, operational and technology pie from the front to the back office. To that end, the firm has made a number of stunning acquisitions over the years: In mid-2012 it acquired Cadis for its celebrated EDM platform—which has won the best data management platform category in the Buy-Side Technology Awards every year since 2007—while in January 2014, it snapped up thinkFolio, a relatively small London-based portfolio management platform provider, known for its outstanding reputation and ardent supporters in the City’s buy-side circles. Predating those acquisitions was the addition of a relatively unheralded transaction-cost analysis platform provider, Quantitative Services Group (QSG), to the Markit stable, an acquisition that has since paid handsome dividends.

As a discipline, transaction-cost analysis (TCA) is unlikely to set pulses racing, but it is an important business process for both buy-side and sell-side firms to manage in order for them to objectively measure execution quality. Essentially, TCA measures “slippage”—the difference between the price quoted to an investment manager and the price it receives once various execution costs are factored into the transaction. Needless to say, organizations look to minimize slippage by analyzing past executions, which, naturally, impacts their broker and exchange selection.

Markit TCA is an independent, multi-asset global analysis platform that combines execution, algorithmic, venue and smart order router evaluation analytics. The service provides actionable insight to brokers and asset managers to enhance and synchronize their trading-related execution quality management, compliance, and management reporting capabilities.    

In June this year, Markit announced that it had integrated its TCA data into FlexTrade’s FlexTrader execution management system (EMS) platform, a move that not only bolsters the functionality embedded within the FlexTrader EMS by allowing its substantial clientele to collect Markit’s basic pre-trade data via the FlexTrader EMS, but one that also allows mutual customers access to enhanced pre-trade data and in-depth post-trade analysis reports on a T+1 basis through Markit’s website. 

Other technology vendors that featured prominently in this category include Thomson Reuters, UBS Delta, FIS (formerly SunGard) for its Fox River offering and TradingScreen for its TradeAnalytics service.    

 

 

Markit TCA is an independent, multi-asset global analysis platform that combines execution, algorithmic, venue and smart order router evaluation analytics. The service provides actionable insight to brokers and asset managers to enhance and synchronize their trading-related execution quality management, compliance, and management reporting capabilities.
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