As far as Abel Noser is concerned, the highly fragmented nature of FX liquidity has traditionally hurt the buy side's ability to achieve best execution in currency trading.
[Does TCA Really Work for the Buy Side?.]
In order to combat this, the firm announced the rollout of a transaction cost analysis tool it contends will enable buy-side trading firms to better measure the trading performance of their custodians, brokers and managers. In the long run, Abel Noser said its FX TCA platform will help its buy-side customers to quantify the costs they incur from cross-border trades and equip them to choose the best possible strategies.
"With recent currency-trading litigation against custodial banks and the current OTC regulatory environment, traders and investors are starting to demand more reliable and transparent methods to benchmark executions and costs," Abel Noser president James Noser said. "Our clients are increasingly performing TCA on their FX trading. They are often finding costs that dwarf those found in equity trading."
Abel Noser Chief Executive William Conlin added that with a growing number of firms now using TCA for FX, he wouldn't be surprised if currency trading costs fell, noting that such a drop would what happened in the equities trading world during the mid-1980s.