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European platform bolsters connectivity via best execution functionality

LinkedTrade, the digital structured products multi-dealer platform, developed by RiverRock Technology Solutions, earlier this year, has rolled out a Digital RFQ (Request for Quotes) tool.

The Digital RFQ Tool is the latest addition to the platform and it’s targeted at private banks and relationship managers seeking to “obtain firm tradable prices seamlessly from investment banks to ensure best execution”, according to Nicolas Gaumont-Prat (pictured), managing director, at RiverRock Technology Solutions.

“The new functionality is aimed at supporting the best execution requirements, and complements our multi-issuer pricer released earlier this year,” said Gaumont-Prat.

In addition, the investment banks connected to LinkedTrade will be able to provide instant firm prices with no human being intervention, whereas the banks not connected to the platform or without connectivity capabilities will still be able to interact with LinkedTrade but with a longer response time, according to Gaumont-Prat.

“The new tool seeks to fill a gap in the market so that private banks can now access – digitally – pricings from their investment banks’ long-term relationships, regardless of the investment banks current technologies (some being fully digitalized and others not yet digitalized),” said Gaumont-Prat.

“The tool leverages the existing digital capabilities of some investment banks which can confirm orders within seconds, whereas those that are not yet digitalized might take longer to confirm an order. The aim of LinkedTrade is to offer private banks and asset managers a full digital customer experience in a market not yet standardised.”

The advantage of the new tool however is that it enables any private bank to link up with any investment bank regardless of their level of digitalisation, and enables them to design a much higher number of tailor-made solutions within a tighter regulatory framework.

“In Europe, we are at a transition stage where some investment banks are very advanced with digitalization whereas others don’t have the same level of development,” said Gaumont-Prat. “Our digital RFQ Tool provides that connectivity to facilitate the contact between all the parties. Once a product has been executed the product goes automatically into a lifecycle management module to risk manage the user’s portfolio during the secondary market.”

Gamount-Prat also noted that digitalisation is bringing efficiency at every level of the structured products value chain including design, pricing and trading, but there are still areas around pricing that can be improve including pricing errors.

Linkedtrade, launched in March this year, is “getting a strong traction” and has a number of private banks and relationship managers using it, according to Gaumont-Prat. “The number of bespoke pricings and requests going through the platform is steadily increasing,” he said. “Buy-side institutions are able to offer the end clients more flexibility and a greater access to structured products for smaller investment sizes.”

The platform now has a number of investment banks using the multi-issuer pricer, according to Gaumont-Prat. “The global investment banks which already used our digital RFQ module have appreciated the simplicity of our technical approach”, said Gaumont-Prat, adding that private banks are rapidly shifting towards technology to be able to design and execute a much higher number of tailor-made solutions while addressing a number of regulatory requirements around suitability, transparency, etc. It also allows private banks to reduce costs and the response time for the end clients.

“Our goals are to continue promoting the digital connectivity between investment banks and distributors,” he said. “We want LinkedTrade to be at the forefront of developments in the digital transformation of the structured products market, and to respond to the needs of the private banks by providing a comprehensive hub for their needs.”

Going forward the platform has plans to continue adding new digital functionalities, and move to the next level by deploying artificial intelligence and machine learning algorithms to expand the service and tools offered.

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