The recommended guidelines for TCA in equities is the result of work by the FIX TCA Working Group to address the challenges currently faced by market participants to determine the cost of trading at any or all points in the investment cycle. There are multiple methodologies and terminologies in current practice, which can result in a lack of transparency and objectivity while producing contradictory results.

To address these concerns, the TCA Working Group polled the members to determine the specific problems. Two of the most important items identified were the need to create a glossary of industry acceptable TCA terminology and to define a standardised set of best practices to allow for a more consistent evaluation of transaction costs. The approach has been to focus on core concepts as broadly as possible while targeting a mainstream audience.

The benefits of this initiative will be industry-wide, spanning the buy-side, sell-side and vendor communities. The initial scope of the project has focused on equities, given that TCA has dominated this asset class for a number of years. However, the benefits will eventually be expanded to cover futures and options, foreign exchange and fixed income sectors.

Given that this is the initial release of guidelines by the TCA Working Group, Co-Chair Michael Napper, Director and Head of Global Client Analytics Technology, Credit Suisse and Global Client Connectivity Technology, wanted to emphasise that readers should embrace the entire document to gain a better understanding of its overall value.

He stated, "While the initial focus has been the glossary of terms, we have also provided TCA perspectives based on market structure and industry segment. Additionally, we have also taken the approach to recommend best practices where feasible while recognising some issues may never easily be standardised. Going forward, we will investigate the possibility of enhancing the FIX specification to facilitatte the TCA data collection process."