January 13, 2014

Credit Suisse Advanced Execution Services (AES) has joined the REDIPlus execution management system (EMS) six months after it was spun from Goldman Sachs into REDI Global Technologies, an independent technology company.

The deal is an important win for REDI since Credit Suisse is a major broker and a top player in algorithmic trading that participates on many other broker-neutral EMSs.

“Since the separation, Credit Suisse was one of the brokers we didn’t offer access to, and we are very happy to have now because it validates our business model,” commented Rishi Nangalia, CEO of REDI Global Technologies LLC, in a phone interview. It recognizes “our independence, and the fact that we are providing a valuable service for our clients under the new structure we have established,” he said. “There were clients we didn’t work with under our previous ownership as a proprietary, broker-owned platform, but now that we are independent and multi-broker, REDIPlus is available to more clients who want access to more than one broker,” said Nangalia.

Last July, Goldman sold off its majority stake to the consortium of investors, so each of them — including Goldman — each hold a minority interest. The five investors are BofA Merrill Lynch, Barclays, BNP Paribas, Citadel Securities and private equity firm Lightyear Capital.

However, Credit Suisse didn't invest; it's a pure partner. [For more on REDI and Citadel Technology Tackle the "Holy Grail", see Ivy Schmerken's related story.]

Over 100 brokers are now on the EMS platform. Through these registered broker dealers, REDI has access to 97 percent of the world’s equities, futures and options markets across the Americas, Europe and Asia. Asset managers and hedge funds use REDI to route orders to their brokers’ algorithms.

“REDI offers Credit Suisse a new way to serve investors,” said Pankil Patel, co-head of Credit Suisse’s AES U.S., in the release. “It’s a new way to offer the wide variety of algorithmic tactics that allow our clients to reduce their market impact, improve their performance versus benchmarks and focus on the bigger picture.” The firm provides algorithms in more than 40 countries on six continents.

“Our clients can now use REDIPlus to route to Credit Suisse in various markets for various asset classes,” explained Nangalia. The clients are located across the globe; they can execute global equities, options and futures trades with Credit Suisse. “The early adopter clients were either already using REDIPlus to route to other brokers, but wanted to access Credit Suisse,” said Nangalia. Or, they could have been using other platforms to access Credit Suisse but they were familiar with REDIPlus, he said.

Buy-side firms are also consolidating multiple systems and tools on their desktops, signing up a major broker helps firms uses fewer platforms.

“Historically a lot of our clients had multiple trading systems, and now they are trying to consolidate those systems to cut costs and complexity. They typically want to migrate to the system that they enjoy the experience on,” said Nangalia. With the trend toward consolidation and integration, the addition of Credit Suisse on REDI benefits clients that are looking to reach more of their brokers on a single platform.

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Ivy is Editor-at-Large for Advanced Trading and Wall Street & Technology. Ivy is responsible for writing in-depth feature articles, daily blogs and news articles with a focus on automated trading in ...