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TABB Group, the independent capital markets research and consulting firm, today launched Clarity, an exclusive US equities market trading venue and routing analytics (VRA) service. It is designed to help money managers, institutional investors, brokers and trading venues standardize, gather, aggregate and analyze execution information and data across all major brokers.
As partners, Bloomberg Tradebook, Cowen and Company, Sanford Bernstein and Weeden & Co. are non-financially incented firms helping to build out the product as advocates for greater transparency. Serving as Advisory Board members, they are working closely with seven major investment management firms and executives at TABB Metrics™, a new data-driven division at TABB, developing an accurate, consistent framework for analyzing critical execution information and data, the benefits of which include increased transparency; streamlined workflow; consistent, cooperative analysis; enhanced broker-client relationships; and standardized output.
“In today's fragmented US equities market with 54 trading venues,” says Larry Tabb, founder and CEO at TABB Group, “it is difficult for institutional investors to gain a clear understanding of how their orders are executed.” Where and how orders are shopped, he adds, has a significant impact on information leakage, opportunity cost and quality of execution. “Traditional Transaction Cost Analysis metrics are insufficient to determine the true costs of trading.”
Clarity has been developed to help institutional investors understand the complexities and intricacies of broker venue and routing data by putting this massive amount of information into context. This enables money managers to work with their brokers to improve their execution quality and brokers to work with their clients to better appreciate the challenges and costs of execution. “The problem is,” Tabb says, “investors are increasingly requesting execution and routing information from their execution partners but most buy-side firms lack the expertise to know exactly what to ask for, how to analyze the massive stream of information and more importantly, how to interpret the results.”
Under the guidance of the Clarity Advisory Board, senior-level representatives from the investor and broker communities will meet regularly to develop a common set of definitions, standards and analytics that will be applied to all brokers and investors in a clear, transparent fashion
“TABB Group is addressing the growing desire for more transparency around execution quality and routing practices in the US equities market," says Ray Tierney, president and CEO of Bloomberg Tradebook. “Tradebook decided to sign-on to TABB’s Clarity Advisory Board because it complements our ongoing effort to be more transparent and enables us to help drive change in our industry."
“We are pleased to partner with TABB to provide clients with tools to help navigate an increasingly complex trading environment,” says John Cosenza, co-head of electronic trading at Cowen and Company. “Our clients are increasingly requesting information on routing practices to provide clarity around execution, measure the success of brokers and ensure their orders are handled in the best way possible. The TABB Metrics Clarity VRA service provides data-driven transparency into the US market structure and trading execution that is sorely lacking across our industry.”
“We are excited about the opportunity to work closely with TABB Metrics,” says David Liles, global head of electronic trading at Sanford Bernstein. “Bernstein has made agnostic, client-centric routing a core tenet of our execution platform, and we welcome the effort to help shape a standardized reporting system to help our clients understand how their orders are being handled.”
“We're excited to align Weeden & Co with other industry thought leaders and help develop best practices for venue and routing analysis,” says Lance Lonergan, CEO at Weeden &Co. “The TABB Metrics Clarity service helps us provide our clients the execution transparency sorely lacking across our industry.”
Other Clarity Advisory Board member-firms will be announced shortly, says Tabb.
