Highlights:
- BME’s TCA service will allow market participants such as fund managers, brokers, and broker-dealers to analyze the execution quality.
- A big data solution will help users to produce a detailed TCA report.
- TCA will help to reduce computing times and offer personalized MiFID II-complaint reporting service to consumers.
BME introduced a new big data platform
Spanish stock exchange Bolsas y Mercados Españoles (BME) has revealed a new big data platform to drive its transaction cost analysis (TCA) and the Best Execution service. BME is the operator of all financial systems and stock markets in Spain. BME Inntech operates TCA service to allow market participants such as fund managers, broker, and broker-dealer to analyze the execution quality.
BME’s TCA also allows participants to codify and implement their best execution policy in the software and ensures parameters are fulfilled using data from several sources.
Big data solution will help users produce a detailed TCA report with a cost analysis and summary broken down by trader, market, broker, and client. To maximize the usage of big data collected from enrolled brokers, the Spanish trading group says, “It allows clients to assess execution quality by comparing prices negotiated by the broker for each stock with those posted by other market venues.”
Rising adoption of TCA
Several market participants across the globe prefer the TCA to evaluate trading performance and analyze implicit costs under a range of market conditions. It allows traders to assess historical trading data compared to data virtualization technology and liquidity providers.
Berta Ares Lombán, General Director at BME Inntech, commented: “Over the last few years, we have seen a decrease and standardization of the commissions (direct costs) generated from the intermediation of orders. In this context, the implicit execution cost resulting from order management takes on much greater importance. More and more investment managers rely on TCA reports to measure this implicit cost and use this information in their broker selection procedure.”
This novel platform from BME will help to reduce computing times. It will offer personalized MiFID II-complaint reporting service to customers to ensure they get the best possible results.
The incorporation of big data capabilities will enhance BME’s position as a technological partner that offers services and solutions encompassing the entire value chain.
TCA tools’ future is expected to be promising owing to the growing transparency requirements that define all market participants’ behavior, including the need for buy-siders to prove the best execution.
BME is presently being integrated with the Swiss exchange operator SIX Group following its EUR 2.8 billion acquisition of the Spanish exchange operator in June 2020.
