State Street Global Markets, the investment research and trading arm of State Street Corporation will provide Scottish Widows Investment Partnership (SWIP) with commission management services.
Under this new mandate, State Street will be responsible for overseeing SWIP’s commission sharing arrangements (CSA) with brokers and research providers. The current industry practice for commission sharing can be complex and inefficient since investment managers, CSA brokers and research providers operate independently.
State Street’s CSA outsourcing service streamlines the commission sharing process by facilitating communication between all parties involved.
Acting as an intermediary, State Street manages payment of all research commitments, including calculation of research splits to ensure that providers receive a single payment regardless of the number of brokers used.
State Street’s service also provides detailed reconciliation processing and consolidated monthly statements.
“As our CSA program expanded, State Street offered us an innovative solution to simplify the commission sharing process. We are confident that this solution will help to significantly improve our program’s overall operating efficiency,” says Tony Whalley, investment director, SWIP.
The new mandate builds on State Street’s long-standing relationship with SWIP. In 2000, State Street was appointed to provide SWIP with a full range of investment operations outsourcing services. SWIP renewed its outsourcing arrangement with State Street in 2005 for a total of 13 years, an industry first in Europe.
“We are excited to expand our relationship with Scottish Widows Investment Partnership. With the growth of commission sharing arrangements, investment managers must have an efficient solution that not only streamlines their processes, but also ensures that client confidentiality remains in tact,” says Nick Bonn, executive vice president and head of securities trading, State Street Global Markets.