S3 ("the Company"), a financial services software company that provides customized solutions to monitor and analyze trade execution, today announced the launch of its Fixed Income Execution Quality Suite ("the Suite").
The Company now provides insight into those factors impacting best execution in the fixed income market, in addition to the equities and options analysis capabilities that S3 has offered for years.
The Fixed Income Execution Quality Suite provides a complete analysis of execution quality for corporate, municipal and TRACE eligible agency bond trades. While the use of new technology, including electronic trading systems, continues to increase for fixed income securities, trading still occurs primarily over-the-counter through individual dealers. With this decentralized market, along with the fragmentation in the electronic trading systems, the transparency provided by S3's Suite is essential for clients to provide and prove best execution. The platform incorporates data from a variety of sources, including TRACE, EMMA, evaluated prices and market maker quotes.
One of the largest online retail brokerages has deployed the Suite as its first customer, and is using its proprietary technology and advanced methodologies for both internal and external reporting and analysis. Clients utilizing the Suite have the ability to examine historical prices and orders, as well as to compare their fixed income executions with other trades in the market in order to determine those factors impacting best execution. This depth of analysis is critically important, as there has historically been little execution data available for fixed income trades, and provides firms with the information necessary to determine execution quality for these volatile securities that often have wide spreads.
Mark Davies, CEO of S3, commented on today's news, "We are proud to now offer a groundbreaking level of execution quality transparency for fixed income securities trading, as we have provided for the equities and options markets for years. The Fixed Income Execution Quality Suite enables clients to distinguish the execution quality of their orders from overall market conditions via a deep level of analytical granularity. The platform allows for the analysis of trade prices against a wide and detailed set of metrics, simplifying the search for best execution and enabling firms to easily manage compliance initiatives. S3 now offers a more in-depth view of the corporate, municipal and TRACE eligible agency bond markets than what has been previously available to the marketplace, providing our customers with the requisite information for fixed income execution quality and ensuring a fairer trading environment."
The Suite simplifies the compliance process and validates the execution data that clients submit to regulators. FINRA, MSRB and other entities are increasing their oversight of the fixed income markets in an effort to bring further transparency to these historically opaque securities. Firms are now required to provide data proving that their fixed income trades benefit customer order flow and meet best execution obligations. This has become even more crucial in recent years given the increase in the number of available venues for fixed income trading, including automated trading systems and other electronic platforms, which has added new layers of complexity to these markets. The Suite allows S3's clients to compile a robust audit trail to prove that their orders are executed to the greatest benefit of their customers, ensuring full compliance with execution quality regulations.
Mr. Davies concluded, "Providing detailed data analytics for fixed income executions is crucial to enhance transparency in these markets, especially in light of greater regulatory oversight. The Suite allows customers to navigate increasingly complex regulations, ultimately improving trust in the fixed income space. We developed the platform based directly on client feedback, supporting their compliance needs and simplifying the pursuit of best execution for fixed income trades. The market for these securities has evolved significantly in recent years as a result of the increasing use of electronic trading platforms, and the Fixed Income Execution Quality Suite allows customers to more effectively and fairly trade these securities as the market continues to change. We look forward to continually improving the software and to incorporating new enhancements to the Suite over the coming months."