Bringing you live news and features since 2013
Bringing you news, views and analysis since 2013
TABB Group Sayena Mostowfi

21009

Buy-side firms intensify focus on measuring trading and research costs, says TABB Group

RELATED TOPICS​

Compliance with global regulatory regimes and market structure changes is leading traditional asset managers and hedge funds to take a holistic approach to measuring trading and research costs. 

Uncovering trends and drivers from interviews with 100 US buy-side head traders, TABB Group has published part one of the 12th annual benchmark study, “US Institutional Equity Trading 2016: Buy Side Emancipation or Purgatory.” The report examines buy-side firm’s top initiatives, commission wallets, execution channels, broker lists and unbundling of trading and research costs.

Report co-authors Sayena Mostowfi (pictured), a TABB principal and head of equities research, and research analyst Valerie Bogard, explain that in conjunction with a shift in regulatory focus from exchanges and broker-dealers to buy-side institutions, a European regulation is set to fundamentally transform buy-side businesses in the U.S. TABB’s study found that due to the global nature of operations, client demand and competitive forces, 66 per cent of buy side firms interviewed for this year’s study will be impacted by MiFID II, up from 38 per cent last year.
 
The regulatory focus in anticipation of MiFID II has served as a catalyst for further data collection and operational transparency that is forcing buy-side firms to improve their measurement of explicit costs and market impact in order to prove best execution practices. According to TABB, the solution to these challenges in the new global ecosystem is the adoption of new technologies that can support these efforts. In this year’s report, 45 per cent of participants listed technology changes as their top initiative in 2016, with 20 per cent specifying implementing new TCA providers.

“As the buy-side improves measurement processes and explores the ability of new technology to collect, measure and analyse their broker lists, it is likely that existing broker lists will become even more concentrated,” says Mostowfi. “With approximately one-quarter of the broker list already receiving three-quarters of buy-side commissions, increased focus on core brokers will contribute even further to this trend. As our research finds, one-third of asset managers and nearly one-quarter of hedge funds expect to decrease their broker lists in 2016.”

Latest News

Irish domiciled funds surpassed EUR4.3 trillion AuM (Assets under Management) at end-March 2024, a 15..
New analysis by London-based Nickel Digital Asset Management reveals 38 listed companies with a combined..
Bloomberg has announced that for the first time, its proprietary Bloomberg Second Measure (BSM) transaction..

Related Articles

Global ESG Investing
On May 15 Florida’s Republican Governor Ron DeSantis signed legislation that furthers his ongoing campaign to oppose the role of climate change and ESG factors in state policymaking...
On May 15 Florida’s Republican Governor Ron DeSantis signed legislation that furthers his ongoing campaign to oppose the role of..
Trends
The trend to buyout among the UK’s smaller defined benefit (DB) schemes continues with a slew of new sub GBP100 million deals announced this month alone...
The trend to buyout among the UK’s smaller defined benefit (DB) schemes continues with a slew of new sub GBP100..
Different flavours
In what is believed to be the first survey of its kind in the UK market, Nedgroup Investments, the investment-led, multi-boutique global asset manager with over USD20 billion under management, recently undertook a survey with 204 UK investment professionals, seeking insights into their perceptions and attitudes towards boutique asset managers...
In what is believed to be the first survey of its kind in the UK market, Nedgroup Investments, the investment-led,..
UK map
UK local government pension schemes (LGPS) are leading the charge on investment in private markets issuing tenders set to be worth billions of pounds in the coming years...
UK local government pension schemes (LGPS) are leading the charge on investment in private markets issuing tenders set to be..
Subscribe to the Institutional Asset Manager newsletter

Subscribe for access to our weekly newsletter, newsletter archive, updates on the site and exclusive email content.

Marketing by