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  • Market Context
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Market Context

The Challenge

In recent years global equity markets have seen the growth in the use of investment systems designed to generate alpha from the analysis of sell side trade ideas. This search for alpha, coupled with regulatory environments that encourage uncoupled and performance – oriented fee payments, has meant that the electronic alpha capture market has continued to grow in importance and value.

Globally, more brokers are looking to send their trade ideas to clients and on the buy-side increasing numbers of funds are generating investment signals from trade ideas and analysing the performance of ideas as part of their fee payment processes. The market is evolving and fragmenting rapidly with more participants looking to build and use their own systems and with multiple vendors serving the market. This gives market participants a dilemma. How do they distribute or receive ideas to or from multiple entities without putting a series of complex system connections between them?

TIL’s Solution

Since its inception TIL’s vision has been to create a vendor and system neutral utility to enable the fast and efficient transmission of electronic trade ideas from banks and brokers to their institutional and hedge fund clients on the buy-side. This vision has been achieved by the development of TIL’s Hub which enables the transmission and routing of trade ideas between organisations, irrespective of the system or vendor platform either party may use and the provision of flexible APIs to support this.

Users of the Hub include:

• Investment banks and brokers with their own electronic alpha capture authoring systems
• Systematic hedge funds or institutional funds with their own systems that ingest and analyse trade ideas sent to them by multiple brokers
• Commercial vendors offering trade idea authoring and idea viewing solutions to the international broker and investment management community

With an increasing number of sell-side firms looking to build or enhance existing systems to facilitate the authoring of trade ideas, and growing numbers of quantitative, or “quantamental” funds using trade ideas to generate alpha, the need for a way to simply and efficiently manage the distribution of trade ideas has grown. TIL’s Hub does exactly that.