ITG has built a new system that offers the buyside a one-stop portal to manage their commission payments across the globe and across asset classes.
The new system, known as Commission Manager, replaces a U.S.-centric commission management system ITG inherited from MacGregor when it purchased the execution technology firm in 2005. The old system was used by North American clients for trading in U.S. equities.
The agency-only broker’s Commission Manager system allows buyside traders across the globe to either credit their CSA bank from trades executed through ITG or they can opt to pool credits from any firm for which ITG aggregates CCA/CSA credits, explained Jack Pollina, managing director and global head of commission management at ITG.
The system also calculates and sends out commission payments in a broker’s home currency.
“Now our commission management system is a global product for global clients,” Pollina said. “Clients wanted to transact business in their own native currencies. The old system couldn’t handle issues local to where they trade and manage multiple managers across many countries.”
Commission Manager works in multiple currencies across the markets and can be tailored by a trader, by region and assets . A trader can track global equity and option trades in a preferred currency and language, with the ability to indicate foreign exchange rates and tax details on payments.
For example, an institutional investor can log on in Italy, look at his trades and costs in euros and manage local taxes though the system. This couldn’t be done in the old system.
ITG aggregate credits from more than 75 executing brokers and can help the buyside trader pay any of more than 4,000 research providers and vendors worldwide.
“ITG Commission Manager saves valuable time for institutional investors and enables them to focus on their core investment activities,” Pollina said.
While making the payment of research more efficient for the buyside, the system also helps manage the logistics of trading by helping the reconcile trades easier, contract management and the ability to manage multiple brokers’ commission sharing and client commission arrangements in one program.
The system was rolled out to North American clients in December as part of a “soft launch” but is now available globally and is in use by 350 firms.
Pollina added that more services, such as a “broker vote” tool, will be incorporated into the system in the future.