Today, Edison Partners and Clearpool Group were featured on Markets Media following the announcement of our investment in the next-generation provider of electronic trading software for institutional sell-side and professional trading firms. Check out this short excerpt of the article on what piqued our interest in Clearpool.
Until now, it has been the voices of investors driving the demand for greater transparency into how and why their money is moving around, where their trades are being executed, and what are the associated brokerage costs.
“What we will see in 2016 is regulators adding their voices to those of investors,” said Joseph Wald, chief executive officer of trading-technology provider and agency brokerage Clearpool Group. “There will be a lot of new regulation like Institutional 606, Form ATS-N and other initiatives.”
While the ‘Bulge Bracket’ and other brokers have provided more transparency to their buy-side clients over the past half-decade, they stop short when it comes to certain specifics, such as giving clients a peek into the brokerage’s execution protocol, the liquidity venues the brokerage uses to execute the trade and the order in which they are used.
“For the better part of a decade, firms have ‘architected’ their systems to maximize the profits from their execution protocols,” said Wald. “It’s built into their systems and I doubt they would want to untangle all of their systems, or would even be capable of doing so.”
To meet this growing need, earlier this year Clearpool launched its own service that lets clients define their own execution protocol via Clearpool’s Web-based user interface. Traders can use Clearpool’s point-and-click interface to define where their orders are routed and in which order.
Allowing clients to define their own execution protocols “is something that other brokerages will not let you do,” said Wald.”They may do it for a large buy-side client, but they will never allow a white-label sell-side client, of which there are hundreds and hundreds, to have these capabilities for their own buy-side clients. Clearpool gives any sell-side firm the ability to completely control their electronic and algorithmic trading.”
Such an approach piqued the interest of growth equity firm Edison Partners, which has invested $8 million in Clearpool.
Read the full article on Markets Media.