02.04.2014
By Terry Flanagan

BofA Merrill Lynch Launches Broker-Dealer Instinct

Bank of America Merrill Lynch is making Trader Instinct, its global equities trading and consulting platform, to sell-side brokers via Broker-Dealer Instinct, a trading, clearing and order flow management platform.

Broker-Dealer Instinct is a multi-asset platform that provides sell-side firms and their clients access to many of the same electronic trading tools that BofA Merrill’s internal trading desks use, as well as the infrastructure that the firm has built and continues to expand and invest in.

“Broker-Dealer Instinct is a customizable set of solutions for BDs to manage their trading and capital usage needs,” said Jonathan Werts, head of broker-dealer execution at BoA Merrill Lynch. “You might need intelligent routing to the marketplace, or clearing and financing in equities, options and futures at a very efficient rate, or you might need to white label algorithms. Broker dealers have a hard time keeping up with the cost of technology and regulatory environments, so outsourcing your execution needs becomes very efficient and compelling.”

Brokers can leverage BofA Merrill’s memberships to exchanges and other venues to achieve high-quality execution in a cost-effective manner, the company said. The platform provides choice and flexibility to pay for research and execution, and the freedom to use the preferred strategy regardless of broker or commission structure.

Broker-Dealer Instinct is a platform for clearing, financing, technology,, white label, routing, and commission management. ”It’s a broad wrapper of services that we can offer to broker dealers,” Werts said. “A number of the same algorithms that our own desks use are available to broker dealers.”

The platform enables the sell-side to deploy multi-asset trading tools to their trading desks and offer clients seamless access to liquidity, the company said. Order routing management can be easily configured and white labeled. Benefits include global market access and liquidity sourcing via Instinct X, BofA Merrill’s ATS.

The platform also provides access to two clearing systems, Merrill Lynch Pro and Broadcort, which offer end-to-end clearing, financing and trade processing that frees up broker-dealers to focus capital and resources on clients and trading activities.

“Merrill Lynch Professional Clearing clears all U.S. and many non-U.S. products, and is one of the largest clearing firms for both equities, equity options, ETFs and futures,” said Gary Yetman, head of Merrill Lynch Professional Clearing Corp. “We bring to the table BofA Merrill Lynch’s financial strength and our unique characteristics around market maker clearing. Through our Broadcort entity, we are also big in the introduced clearing business.”

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