Fidessa's Justin Llewellyn Jones examines the pressures faced by mid-tier brokers in the modern trading environment.
Throughout the steady evolution of the way US brokers
manage their market access, one priority has remained constant:
the need to achieve best execution. Whether dealing with a
hedge fund, an institutional money manager, a retail investor
or another broker-dealer, best execution is the common demand
from all clients. Brokers that are not able to deliver - and
prove that they are - will be left
The market access evolution has
also seen changes in the role technology plays. Always central
to a broker’s market access decision-making, the
era of fragmentation brought with it new liquidity pools and a
demand for smart order routing (SOR) tools that could handle
simultaneous access to multiple venues. While SOR technology
enabled brokers to achieve optimal execution, it also allowed
them to leverage their own memberships to advertise share
volumes and increase market share.
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