Daiwa Securities America, a U.S. rendition of its Japan-based parent, prefers to model its business on Switzerland's ideology rather than that of either the United States or Japan.
That is, the firm has chosen a decidedly neutral course in its pursuit of direct-market-access technology by allowing its buy-side clients to choose providers. Rather than purchase or partner exclusively with one DMA vendor, Daiwa Securities America works with many, allowing clients to select not only a DMA vendor of choice for a particular trade, but also route that order to any broker they choose.
In offering a buffet-style selection of DMA vendors, Daiwa also can extend to clients the panoply of algorithms those vendors have devised. "We were finding that, increasingly, we need to be in the algorithm market and provide clients with a good variety," says Michael Mollemans, head of electronic execution sales at the firm. "As opposed to making our own system up like some other brokers, we decided to partner with some of the most well-known and respected algorithm companies so we can offer clients flexibility and options."
Mollemans says that this approach meshes well with the desire of most buy-side clients to split up orders - sending portions to different brokers using different algorithms. To date, Daiwa Securities America works with DMA vendors Aegis Software, Miletus Trading, Algorithm Trading Solutions, InfoReach and TradingScreen - all based in New York.