February 17, 2012
Equities Order Flow Drops for Third Straight Year
The U.S. equities market has been losing the order flow battle for three straight years and will continue to fall until 4th quarter 2012, a Tabb Group Research Report said.
Concurrently institutional equity brokers saw their third annual decline in commissions. Moreover, execution-only commissions will slide more precipitously in 2012 as the buy side continues to squeeze every dollar out of their constrained wallets.
Even so, Adam Sussman, a Tabb partner, director of research and author of the new report, "US Institutional Equities: State of the Industry 2012," expects single-stock volume to rebound during the fourth quarter of 2012.
"The state of the US financial industry is improving with the U.S. equities market viewed more as a savior and less as an albatross, as stock prices stabilize, volatility subsides and correlations unwind," he said.
In January 2012, Tabb Group also queried 10,500 members of TabbForum for direct input on a number of issues, including estimates for the average daily volume for U.S. equities, which they forecast at 8 billion, a slight increase over 2011's 7.8 billion and well above 2010's 6.8 billion. "Enabled by automation and fueled by fear, volumes were in a bit of a bubble from 2008 to 2010 but Tabb now believes that U.S. equity volumes will modestly decline during 2012 and begin to pick up steam in late 2012 and into 2013," said Sussman.
"However, Tabb believes that while the state of the industry is on the path to recovery, the strength of that recovery over the next several years depends on how well everyone works together today towards improving the industry," he said.
BNY Mellon Develops Omnibus Platform
BNY Mellon Asset Servicing has developed a new platform, OmniAccess, that will make it easier for asset managers and broker-dealers to post, process and view data related to their omnibus, or combined futures, accounts.
Despite back-office challenges, BNY Mellon has "seen a tremendous migration" to omnibus accounts from the more traditional transfer agent model over the past three years, said Eileen Gilfedder, managing director of enterprise investor services, Global Financial Institutions.
"OmniAccess provides clients with the resources they need to optimally manage their shareholder serving obligations," said Michael DeNofrio head of U.S. investor services, Global Financial Institutions.
Citi to Administer Assets for Credit Suisse
Citigroup has entered into an agreement with Credit Suisse's Asset Management division to provide a comprehensive suite of milled office, custody and hedge fund administration services to support part of its U.S.-based alternative investments.
The mandate stipulates that a portion of the middle-office operations within Credit Suisse's Asset Management division will be fully transitioned onto Citi's service platform, which is made up of operations, technology and data management.
"We are pleased to demonstrate the value of our expert staff and leading technology to Credit Suisse's Asset Management division," said Mike Sleightholme, Head of Global Hedge Fund Services, with Citi's Global Transaction Services.