Cogent Consulting today announced the release in the US, UK and other global markets of a new broker dealer version of its CSA Trak technology for managing all details of commission sharing arrangements between sell side firms and their buy side clients.
CSA Trak BD is the latest module in a growing line of Cogent web delivered products to meet the commission management needs of sell side firms. Cogent is the leader in such technology for the buy side, operating more than 100 sites for clients that include many of the world's largest investment managers and hedge funds. These firms use Cogent systems to manage their commissions, including spending channeled via CSAs and CCAs, and to conduct broker research valuations on 600 broker dealers and third party research providers, collectively, worldwide.
Approved by regulators in the US, UK and France, CSA/CCAs provide buy side firms with a more transparent way to pay for "best research" while upholding their fiduciary responsibilities to get the "best execution" possible. As a result, many broker dealers are competing with each other on how best to offer CSA/CCAs to their clients.
"Because CSA Trak BD is so easy to implement and effective to use, we believe it will help sell side firms to retain and/or attract clients during this challenging time in the financial industry," said Robin Hodgkins, President and CEO of Cogent. He pointed out that unlike other technologies, CSA Trak BD:
- Can operate as a broker sponsored site or as a "virtual CSA aggregation" point for clients to manage CSA balances across brokers.
- Is based on a proven system already used by large investment managers and hedge funds to manage CSAs at numerous brokerage firms.
- Is paid for through a simple annual subscription model and delivered over the web.
- Gives a brokerage firm's buy side clients a portal for uploading and approving invoices, viewing balances, and running reports and statements. Third party research providers and vendors have access to their own site as well.
In addition, as an independent firm devoted to the buy and sell side, all data and information processed though Cogent is kept str strictly confidential.
CSA/CCAs permit the unbundling of execution costs from research costs by allowing the buy side to separately pay brokers for best execution while also building a commission pool at those brokers that can be used to pay third parties for best research.
CSA Trak BD tracks this data with far greater efficiency than home grown spreadsheets or databases that many sell side firms currently employ. Users can quickly analyze and report on all commissions received from clients, the research commissions available, which third party research firms should receive payments, and whether there are adequate funds in the pool to make the payment. The information can be managed on an individual client basis, and then combined so that only one check needs to be issued to any third party provider.