State Street Incorporates Charles River into Outsourced Trading Service

State Street Global Markets is integrating the Charles River OMS and BestX TCA platforms into its outsourced trading service as the firm moves to fully incorporate its acquisitions into its full suite of outsourced services, Nadine Chakar, head of State Street Global Markets, tells WatersTechnology.

“We’re doing two types of major improvements right now to the outsourced trading service,” Chakar says. “One is we’re installing the Charles River trading platform, and the other is enhancing our transaction cost analysis using BestX models. The plan is to fully integrate these two acquisitions into our outsourced trading service.”

While the outsourced trading service provides access to different order management systems (OMSs), she notes that as more clients have integrated the Charles River OMS it made sense for State Street to fully switch to Charles River. State Street bought Charles River Development in July 2018, in one of the largest deals in the rapidly-consolidating OMS space. The bank has since sought deeper integration with Charles River, including the development of a single master file of securities data. Chakar says the outsourced trading desk was using an internally-developed trading platform, but will upgrade to Charles River so customers can leverage the platform’s front-to back-office services. 

“We’re installing Charles River for portfolio management and OMS capabilities in our largest outsourcing business, which is transition management,” Chakar says. “We were using internal and external platforms before we started upgrading our capabilities with Charles River. However, slowly but surely, we’ve been taking the best attributes of our existing infrastructure and enhancing with Charles River. From an equity and fixed-income perspective, we definitely want to use Charles River as our buy-side OMS.”

She adds there are no plans to move foreign exchange to Charles River at this time.

For the TCA piece, the bank first integrated BestX’s equity TCA models. The next step will be to add BestX’s fixed income TCA models to its outsourced offering. In August 2018, State Street acquired BestX. The bank’s outsourced trading service has traditionally offered its own TCA models, but will start to upgrade to BestX for its fixed income transactions this year. 

Chakar says these updates were affected by the coronavirus pandemic, which forced some resources away. Even still, BestX was able to put out an upgrade to its TCA offering, including adding fill-position metrics for foreign exchange (FX).

“Obviously, this pandemic has slowed us down a bit but not by a lot,” she says. “Last Monday, we did a big upgrade in a release for BestX so we continue to try and move forward despite these challenging times. We’re upgrading individually and at some point, we’ll bring these all together.”