HCL Technologies Launches Execution Venue Selection Solution for Smart Order Routing

12 December 2008

HCL Technologies (HCL) has today announced the launch of a low latency execution venue selection solution that allows institutions to select the best venue for trade execution at high speed, using built-in and extendible algorithms. The solution, BestXek™ Smart Order Router (SOR), captures the complete execution strategy of a broker or its client and delivers order for execution to venues at ultra high speeds – below 5mS under normal market and preference conditions. This enables institutions to meet priorities such as minimising market impact and costs, maximising spreads and rebates, and effecting market prices as little as possible.

HCL believes that the ability to incorporate venue selection factors, such as visible and invisible liquidity, impact cost and probability of execution and settlement are fundamental features of any product that offers venue selection or SOR.

“In order to deliver the results that trading organisations now demand, a SOR solution must be able to assimilate all information, current and past, on markets and venues, as well as consider and analyse a whole set of other factors unique to its operator,” said Pramod Gupta, head of financial services product engineering at HCL. “At the same time, it is imperative that the solution is able to handle all analysis with low latency, which requires the right kind of integration, computation and data handling technologies, areas in which HCL excels.”

The BestXek™ SOR solution has been developed by HCL’s Product Engineering Group, a transformational programme designed to launch cutting-edge technology products. Highly flexible, BestXek™ connects to various markets to build the consolidated order book and an industry standard Financial Information eXchange (FIX)-based gateway is provided to take in real-time orders from management systems. Order matching, based on several factors such as price, speed and probability of execution & settlement, determines the market that gives the best execution and the order is routed to the selected venue.

BestXek™ SOR is compliant with the demands of current regulations such as MiFID and RegNMS. It also offers a post-trade analytical solution that captures the customer and firm’s execution policies for transparency. BestXek Post Trade Analytics enables back-testing or simulation of the order in different market data by selecting hypothetical venues or execution policies to see how differently the same order would have been executed and what would have been the extra cost/savings in different scenarios. The performance of various execution venues used by an investment firm to execute client’s orders can be evaluated based on various analytical factors and across various parameters such as order type and size.

Directional market statements combined with choice of execution venues is making the task of execution managers even more difficult. Today’s best execution solutions need to be more versatile than just having the ability to make price-based decisions. The requirement has now shifted to meet the needs of the block traders who require speed, configurability and the ability to handle multiple market factors, both current and historical. HCL has launched BestXek SOR to address these emerging demands and increase overall trading efficiency.

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