Bloomberg Tradebook Goes Self-Clearing
Bloomberg Tradebook is now clearing the trades it executes, rather than have the transactions go to third-party clearing firms in a so-called fully disclosed arrangement. The agency-brokerage arm of information-services giant Bloomberg LP tapped Broadridge Financial Solutions to help with the conversion.
“Transitioning to a self-clearing model minimizes Bloomberg Tradebook’s fixed-cost investment in technology and operational infrastructure,” Bloomberg Tradebook Chief Executive Ray Tierney wrote in an e-mail to Markets Media. “It also enables Tradebook to manage client relationships and services more closely, which enhances service quality and the client experience.”
Bloomberg adopted Broadridge’s business process outsourcing (BPO) product to provide U.S. equities clearance and settlement services for its institutional clients. The agreement was reached last year and self-clearing commenced in April 2013.
Self-clearing generally saves money and affords a broker more control over the client’s experience through the lifecycle of a trade, according to Tim Gokey, Broadridge’s chief operating officer. Bloomberg is Broadridge’s 21st client in the BPO area; others include Charles Schwab and Societe Generale.
Broadridge is seeing demand from firms that switch to self-clearing, plus others that are already self-clearing but looking for more efficiency. “There is definitely a mix of between clients who are fully disclosed and became self-clearing, as well as those who were already self-clearing and chose this approach as a better way of being self-clearing,” Gokey told Markets Media.
Established as an execution-only electronic communications network in 1996, Bloomberg Tradebook now offers multi-asset class execution and software services for global equities, futures, options and foreign exchange. Tradebook also provides research from independent research providers, execution consulting services and custom technology and commission-management services to buy-side and sell-side institutional clients.
“Technology solutions providers, such as Broadridge, are making substantial investments in their infrastructure and streamlining business processes to help financial-services firms like us serve clients more efficiently and dynamically,” Tierney said. “In addition, Broadridge is a technology company with a core focus on BPO (business process outsourcing). As such, its business model does not compete with those of Tradebook’s clients.”