Investment firms, broker-dealers, and institutions are mandated to seek the best execution reasonably available for their clients' orders. To comply with this requirement, firms evaluate the orders they receive from their clients and assess which competing market centers offer the most favorable terms of execution. Some of the factors a broker must consider when seeking best execution for customers' orders include, but not limited to: the opportunity to get a better price than what is currently quoted, the speed of execution, the amount of liquidity provided, and the likelihood that the trade will be executed. BXS provides powerful, customized tools to help monitor and manage your trading activity giving you intuitive analysis on the execution quality of your order flow, whether orders being executed internally or by other execution venues. These tools will help your firm implement policies and procedures to help monitor trades being executed outside the NBBO and trading through protected quotes.
In November 2000 the Securities and Exchange Commission adopted Rule 605 (formerly 11- Ac1-5) which mandates market centers that trade in US national market system securities (Reg NMS) to make publicly available monthly electronic reports that include uniform statistical measures of execution quality. The adoption of this rule is intended to increase the visibility of order executions of the securities markets for public investors to address the issue of market fragmentation and to spur more vigorous competition among market participants to provide the best possible prices for investor orders. BXS assists firms in complying with their regulatory obligation of Rule 605 with a web based tool that allows you to view 605 statistics on a stock-by-stock basis, by order type, in the aggregate or an order-by-order basis. Users may drill down to the order level details to research and analyze the quality of each order and how it executed against the NBBO. Whether you're searching for Price Improvement, Effective/Quoted Spread Ratio or Execution Speed, BXS has the tools to help you comply to determine if your orders are receiving the highest quality of executions.
SEC Rule 606 - Our Rule 606 product assists Broker-Dealers that route client orders in covered US NMS stocks (Reg NMS) for equities and options with their regulatory obligation in making available public quarterly reports that, among other things, give a general overview of their order routing practices. The BXS module includes the newly adopted amendments 606(a)(1) for 'held' order flow in addition to full drill-down capability to the order and trade level.
SEC Rule 606(b)(3) - The newly adopted Rule 606(b)(3) under Reg NMS requires broker-dealers & institutions to provide a client, upon request, a report on the firm's handling of the client NMS stock orders submitted on a 'not-held' basis for the prior six months, divided into separate sections of client’s directed and non-directed orders. In addition to providing a complete picture of the routing practices, trading activity, and associated fees/rebates through an interactive report, the BXS Rule 606(b)(3) module features full drill-down capability to the order and trade level and provides user capability to easily generate reports that are in compliance with 606 requirements. BXS utilities data formatting designed to reduce information leakage and thus prevent access to client IDs by the executing brokers while remaining in compliance with all look-through requirements.
Investment firms & market center can analyze their execution quality in a multiple asset classes including equities, options & OTC Markets through this state of the art online tool that will allow firms to view their orders at a high-level summary as well as the ability to drill down on a more granular level to view the order & trade details to see how trades are being executed against the NBBO. This allows firms to monitor the quality of fills executed at different venues. EQR has multiple filtering capabilities by route venue, originating firm, client account number, algos, in addition to order modifiers and grouping capabilities to customize reports. There are multiple statistics to choose from including Effective/Quoted Spread, Price Improvement, At-or-Better %, Execution Speed, Net $ per share, and much more.
Exceptions Reporting is provided to firms on a daily T+1 basis to help firms monitor their order flow and when exceptions occurs - trades that were executed unfavorably against the NBBO (National Best Bid Offer). Whether the order flow is executed internally or sent to multiple trading venues, the NBBO Exceptions Tool helps firms to determine if they are making the right routing decisions. Clients are able to see every exception by order type, have drill down capability to view the life of the order including the order details of each partial fill as well as the NBBO quotes associated with each fill. A new feature of our Exceptions Report incorporates Level-2 market data, (quote & size) which serves to dramatically reduce false positives.
As Best Execution practices have evolved from single transaction analysis surrounding price, to encompassing complex orders, Trading and Compliance professionals alike are seeking to extend their analysis through the use of TCA concepts. Our post-trade Transaction Cost Analysis (TCA) module provides an in-depth selection of over 60 benchmarks including:
Complementary statistics also provide a perspective on trading patterns, algo selection, and broker differentiation. TCA 2.0 has been added to our platform and shares with it our agile and user-friendly model. It is fully customizable and allows the user to choose from a variety of filtering and grouping mechanisms to truly create a bespoke report, providing insight into order flow to assist with both trading performance and compliance.
Rule 611 Trade Through reporting is provided to firms on a daily basis via our portal to help firms comply with the rule by establishing written policies and procedures to monitor and help prevent potential Trade-Throughs – the execution of trades at prices inferior to protected quotes on multiple exchanges.
With BXS, firms will be able to view retail and Institutional trades in NMS stocks that got flagged as a Trade-Throughs, drill down and view the life of the order and each fill's execution price vs. the protected quote at the time of execution, to see where the trade through occurred and at which venue and thus allows firms to act quickly on it.
BXS Trade Surveillance monitors and detects activities for market manipulation, fraud, behavioral patterning, and more across all asset classes and all products, thereby ensuring the prevention and investigation of abusive, manipulative or illegal trading practices in the securities markets. The web-based module is completely configurable that allows users to identify and address regulatory compliance issues and prohibited activities such as:
BXS provides independent third-party regulatory audits and reviews that are required by FINRA and the Securities Exchange Commission.
Backed by over 35 years of experience BXS specializes in cross-asset electronic and DMA trading requirements, including REG NMS, SEC Rule 605, SEC Rule 606, OATS, CAT, TRACE, TRF and MSRB compliance reporting. By utilizing our extensive knowledge of the development of forensic testing and risk assessment of compliance programs in accordance with SEC, FINRA, CFTC rules and regulations, your firm will limit the risk of costly fines. As subject matter experts, we work with you to evaluate, educate and advise on compliance requirements. BXS provides audit services in accordance with FINRA RULE 3110 (Supervision), FINRA RULE 3120 (Supervisory Control System), FINRA RULE 3130 (Annual Certification), and AML (Anti-Money Laundering).
The BXS Consolidated Audit Trail (CAT) solution offers management of the entire reporting life cycle across multiple asset classes, systems, and formats that is compliant with SEC requirements. BXS will ensure your data is in a CAT-reportable format and automate all reporting to FINRA CAT. A secure web-based portal optimizes management of pre/post submissions providing a compete audit trail of activity that allows clients to dynamically monitor and reconcile events.