Financial technology provider ITG Australia has secured a number of asset managers for its commission sharing agreement (CSA) services since it was launched in December 2008.
United States listing requirements prevent ITG giving information on specific client numbers, however, ITG Australia managing director Michael Corcoran said Australian equity fund members using the program collectively had more than $70 billion in funds under management.
A CSA enables s a buy-side firm to choose one or a number of brokers that specialise in trade execution, while also retaining different brokers or independent research firms.
ITG's Broker Pay CSA service allows asset managers to pay for execution through ITG, which then manages the payment for research to the chosen research provider or broker.
Separating the execution of a trade and the payment for broker research allowed managers to get the best research and execution from the providers they believed gave the best value for each, rather than the two services being bundled together, Corcoran said.
"Asset managers are increasingly looking at ways to reduce costs, particularly given this current environment," he said.
"The unbundling of costs between research and the execution of a trade contract not only reduces costs but improves the overall performance of a trade."
Perennial portfolio manager Grant Oshry said the service also allowed the firm to "ease its administration".
"The whole unbundling concept to the execution of a trade allows us to ensure that the commission dollars are put to the best use," Oshry said.
He said because ITG provided the manager with trade execution, conflicts of interest were also reduced as now brokers just provided Perennial with research.
