Tracking Trades to Cut Exchange Bills

Bonaire Software Solutions is offering a fee calculation engine to broker-dealers and other capital market firms to help them better manage – and trim — their trading bills.

Large broker-dealers with multiple desks and multiple exchange connections may be overpaying exchanges on the trades they make, explained Chris John, Bonaire’s chief executive officer.

The higher cost is due to the fact that contracts with exchanges are typically signed at the level of the individual desk, John said. That can preclude the broker-dealer from leveraging the overall volume of its trading, to win discounts from the exchanges.

The monthly bills also may not be split properly between desks. That’s because end-of-the-month bills are allocated to individual desks based on simple percentage formulas, John explained, rather by the amount of trades they actually made.

The firm’s software, called Revport, solves both problems, John said, with precise measurement.

The Boston-based vendor has deployed the fee-tracking system at one large broker-dealer with multiple trading desks and multiple exchange connections. The software tracks every trade every desk at the unnamed broker-dealer executes with every exchange. Then, the software reconciles the expected fees from those trades against the exchanges’ monthly bills.

Bonaire has been marketing Revport to mutual funds and other asset managers for the past nine years to help them manage fees they charge their clients as well as those they pay for distribution.