04.16.2015
By Terry Flanagan

Eze Enhances Commission Management Suite

The UK Financial Conduct Authority’s statement that client commissions must never be linked to research payments, and that commission sharing agreements, by themselves, are insufficient for managing the process, is placing a premium for the buy side on tracking commissions paid to brokers for research and execution.

Rob Keller, executive managing director of product and development for Eze Software Group, said that the company is building out its commission management offerings in response to client demands for tools that can create greater transparency into the commission management process.

“There is obviously a lot of demands from clients for creating more transparency into their review process, and for tracking and reporting on their commission expense,” Keller told Markets Media.

The company has launched Broker Review, a web-based vote tool that allows clients to set up their vote processes on research, execution and investment services as needed.

Other commission management products include Broker Select, a web-based evaluation system for brokers and research providers, and RECAP, a research and execution cost analysis platform that addresses mandates in reporting commission utilization in an unbundled environment. Eze Software says more than 100 buy-side firms use its commission management offerings.

Broker Review enables a buy-side user to log in and vote on brokers according to different criteria, such as quality of research and execution. Another Eze product, BrokerTrak, allows brokers to upload interaction details, and that data can be available for the vote process.

“The broker can upload those events and services into this portal, which the buy-side then can look at when they’re doing their vote to help give them a quantitative and qualitative assessment of the services being provided by their brokers,” Keller said.

Even if CSAs are not banned as a result of the FCA’s stance, the intent under MiFID II is to unbundle commissions paid for research from those paid for execution, and the CSA model will likely need to evolve in result. For example, payment details may need to be broken down to the fund and client level, as annual reporting on research consumed must be provided to the end client as part of MiFID II.

Broker Review is the second product to be added to Eze Software’s new Cloud platform in just under a year, according to the release. Since the start of 2013, Eze Software has substantially increased R&D, enabling the company to continue to deliver enhancements on its core product lines.

“This is another step in bringing all of our capabilities on to the next-generation platform,” Keller said. “As we go through 2015, you’ll see more and more capabilities coming out on our next-generation cloud platform with respect to commission management.”

Featured image by KmpFoto/Flickr under creative commons

Related articles

  1. Upstart exchange has seen market share increase to near 4%.

  2. Goldman Sachs Asset Management’s fundamental equity business manages over $20bn in thematic equities.

  3. Data extraction and integration is the second stage of a digitization process.

  4. With Ankit Mittal, Business Change Manager, Global Trading, Schroders

  5. IIGCC and lead investors will launch a pilot with companies including BP, Eni, Repsol, Shell and Total.