Best execution product of the year: BestX

Oliver Jerome, BestX

BestX provides sophisticated pre- and post-trade analytics, helping investment services firms meet their best execution obligations under the second Markets in Financial Instruments Directive – known as Mifid II – and equivalent regulations.

Following its acquisition by State Street’s GlobalLink division and expansion into equities in 2020, the firm has developed its product offering over the past 12 months to cover multiple asset classes. The expanded offering enables firms to efficiently consolidate their transaction cost analysis (TCA) and best execution metrics with a single provider, computing appropriate and accurate metrics by individual asset class.

BestX’s analytics incorporate a proprietary expected cost model, allowing all aspects of best execution to be measured and monitored. Separate analytics layers have been built for FX, fixed income and equities to ensure accurate computation of asset-class-specific metrics, as well as common metrics that allow consistent cost aggregation for multi-asset portfolios.

Pre- and post-trade functionality is linked, providing an end-to-end view of the trade lifecycle, and is backed by customisable reporting. This allows user-defined thresholds on any metric to be configured and monitored, and auditable workflows around exception explanation and approval.

BestX’s architecture has been designed with asset-class-specific analytics layers, a common user interface and reporting functionality. The business and product remain independent, with a standalone legal entity, data and technology infrastructure. Its open architecture enables links with any execution/order management system or liquidity provider in the market.

BestX’s analytics are delivered via an advanced cloud-based technology stack that is scalable and fast, with specific analytic engines built for each asset class. This allows market nuances and conventions to be correctly accounted for, along with asset-class-specific metrics such as volume-weighted average price for equities, or ‘far-touch’ and yield calculations in fixed income.

The system’s user interface allows maximum flexibility in report generation and analysis of results. Data can be filtered by any attribute, producing a bespoke user-friendly visualisation. Recent enhancements include multi-asset summary views of cost and performance for heads of trading, best execution committees, chief information officers and investors, and asset-class-specific views for traders.

BestX’s data sources are comprehensive. For foreign exchange, intraday data is aggregated from over 120 liquidity providers, with around 1 billion price updates stored per day. For fixed income, the firm processes data for over 2.5 million securities daily from Ice Benchmark Administration’s Continuously Evaluated Pricing feed, as well as from Refinitiv, TradeWeb and MarketAxess. Futures data is taken directly from exchanges, while equities is fuelled by a Refinitiv data feed from more than 70 global exchanges. The firm also provides access to a community pool of anonymised performance data for the buy side for FX and equities. Comprising more than 50 million trade records, this provides further insight and peer analysis.

Judges said:

• “The breadth of products covered is strong.”
• “The firm has clearly kicked on after acquisition.”
• “Great request-for-quote functionality.”

Oliver Jerome, Co-founder and Director, BestX, says:

“BestX provides a fully integrated multi-asset class transaction cost analysis product, covering FX, fixed income, equities, commodities and, in 2022, the launch of cryptocurrency TCA. The product serves multiple use cases, across both the sell and buy sides, effectively allowing an institution to implement and codify its best execution policy in a single platform. Configurable BestX factors, benchmarks, outlier detection and reporting support bespoke implementation and best execution committee reporting. Unique analytics engines provide specific metrics per asset class, in addition to common metrics to allow aggregation across entire multi-asset portfolios.”

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