Boston, November 28, 2011 – A new report from Aite Group examines key trends developing in transaction cost analysis (TCA). Based on Aite Group interviews with broker-dealers, vendors, and the buy-side community, the report presents the views of TCA end users.
TCA, in its simplest form, provides traders with data and analysis around the trades they make and supports their attempts to achieve best execution for their clients. Market developments such as fragmentation, technological advancements, and regulatory change have highlighted the need for increasingly in-depth TCA, and its value to trading firms is increasing and expanding. Once seen by many market participants as a basic monitoring tool for compliance, TCA has evolved into an essential tool, particularly for venue and algorithmic strategy analysis.
“The future of TCA in the equities space looks to grow as asset managers move from analyzing transaction costs to incorporating that analysis into their trade management,” says Simmy Grewal, analyst with Aite Group and co-author of this report. “Because TCA has become a fundamental process within equities trading, asset managers are increasingly pressuring their TCA providers to implement similar analysis in other asset classes, including foreign exchange, derivatives, and fixed income.”
This 24-page Impact Report contains 14 figures. Clients of Aite Group’s Institutional Securities & Investments service can download the report.