Investment Technology Group, Inc. Takes Transaction Cost Control and Analysis to the Web

Business Wire, Oct 5, 1999

NEW YORK--(BUSINESS WIRE)--Oct. 5, 1999--

Comprehensive Transaction Cost Analysis (TCA(TM)) System Provides

Portfolio Managers and Traders With Powerful New Tools

Portfolio managers and traders no longer have to wait for time-consuming research reports to find out what a particular trading approach has cost them, and their clients.

Traders are now able to calculate the transaction costs in real time, using Transaction Cost Analysis (TCA(TM)), a new web-based research tool from Investment Technology Group, Inc. (NYSE:ITG).

"Lowering transaction costs will continue to be a top priority for our clients - and the industry as a whole," said Raymond L. Killian, Jr., chairman, president and chief executive officer of ITG. "We believe our web-enabled TCA system will prove to be a meaningful solution to the need portfolio managers and traders have for real-time information that is critical to their success."

Measurement of trade execution costs is one of the most important elements of performance evaluation and also one of the least analyzed -- until now. Investment managers tend to rely on limited quantitative evaluation coupled with qualitative assessments of performance of various brokers.

ITG's new analyzer allows traders to factor in trade and liquidity difficulties, while evaluating trading performance against a broad choice of benchmarks. These include the open, closing and intraday prices and the Value Weighted Average Price (VWAP). TCA allows comparisons against snap-shot prices from a specific point during market hours, specific date or relative to a trade date.

Using proprietary models, TCA includes a unique aggregation feature that allows customized groupings of trades based on user-defined criteria including broker, account and trader. Using TCA, traders and portfolio managers can see what a trade should have cost relative to the actual expense and make mid-course corrections to improve performance.

Embedded within TCA, subscribers also will have access to ACE, or Agency Cost Estimator. Developed by ITG's quantitative research team, ACE is a powerful model of the hidden costs of trading stocks and provides an advanced model for forecasting total agency trading costs.

"We have been providing these analytical tools to selected clients for some time now," said Killian. "It was important to take it to the next level and take advantage of real-time options."

ITG's new web-enabled TCA system will be available to clients in the fourth quarter. Through its wholly-owned, broker/dealer subsidiary, ITG Inc., ITG is the leading provider of technology-based equity trading services and transaction research to institutional investors and brokers.

ITG's services help clients to access liquidity, execute trades more efficiently, and make better trading decisions.

ITG's web site is located at www.itginc.com.