Reuters’ Orders Direct, a newly launched electronic routing
business for cross border trades also seeks to smoothen the trade process.
The straight through processing system between buy and sell side institutions to the broker, from order capture point to execution and settlement, means transactions can be carried out in seconds, or worked and monitored throughout the day.
Geoffrey Sanderson, managing director securities transactions systems at Reuters, comments:
“Electronic trading is growing in
multiples by the year and the cost of failed trades here is enormous, so the potential benefits of the system are clear.
“For a large institution with a million orders a year, the standard industry error rating is 15%. At the normal $50 average cost for each repair, this represents $7.5m per annum, so the saving to an average institution could be around $3.7m every year, he claims.
Sanderson says Orders Direct is solely for equity trades at present, but says Reuters are currently looking at developing fixed-income and derivatives systems.
And with institutional block trades increasingly needing to be broken down to pass through stock exchanges, meaning that the size of transactions decreases while their number balloons, Sanderson says standardised investment pipelines such as the new Reuter’s service will be part and parcel of convergence within the industry. Hugh Wheelan