BGI ranks broker-dealers by their settlement failures

A new web-platform employed by BGI and engineered by JPMorgan measures and ranks the settlement efficiency of broker-dealers.

Barclays Global Investors (BGI) has implemented a system to measure, analyse and statistically rank the settlement efficiency of its broker-dealers. The platform called TradeSTARRS ranks broker-dealers within and across markets, and is designed to reduce the cost of failed trades.

TradeSTARRS stands for Trade Settlement Tracking and Relative Ranking System.

The decision to use the system comes at a time when money managers are compensating for poor portfolio performance by improving cost efficiencies in their back office systems and removing operational risks. Money managers spend millions of dollars on brokerage fees each year and TradeSTARRS tells them which broker-dealers provide the best service for these dollars.

"This is the tool that has been missing from our tool kit," says Domenic Costanza, head of trade operations in Europe for BGI. "It complements the traditional confirmation performance metrics that we use for measuring broker performance."

BGI participated in the beta-testing of JPMorgan's product. "As the world's largest index-trade volume asset manager, BGI must be able to easily compare broker performance," says John Phinney, head of product development for JPMorgan. "TradeSTARR enables them to determine a specific broker-dealer's settlement performance, while identifying trends and patterns and reducing failed trade costs that directly impact the company."

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