To support its European and Middle Eastern clients in monitoring the activities of their custodian banks, Mercer is to offer Abel Noser Solutions’ (ANS) Foreign Exchange Trade Cost Analysis (FX TCA) solution.
An increasing number of institutional investors employ Mercer Sentinel to undertake regular monitoring of their custodian, and the FX TCA component forms a key part of this service. It can be very difficult to know whether a custodian is performing adequately and Mercer’s service addresses this directly by providing clear independent oversight. The Mercer FX monitoring service will help investors understand if their custodians and investment managers have undertaken their currency trades at rates that are in line with or outside of reasonable tolerances. The service will be available both on a stand-alone basis or as part of Mercer’s full custodian monitoring service.
“The Mercer Sentinel monitoring service provides clear analysis and recommendations on how to address current excessive costs and prevent recurrence,” says John Elmore-Jones, European Director of Mercer Sentinel. “At Mercer, we are committed to giving our clients a competitive edge through access to the best research, analytics and advice. We believe that ANS’ high quality data analysis will enhance our existing offering and will prove invaluable to our clients so they know what hidden costs they are incurring.”
Mercer will use data from ANS’ Trade-Zoom software to measure the FX trading performance of its clients’ custodians, managers and associated brokers. The solution allows users to view both absolute and relative peer cost comparisons based on industry standard metrics.
“Mercer’s decision to use ANS’s solution reflects the quality of our offering and the reputation we’ve built as a pioneer in trade analytics,” says Ted Morgan, Chief Operating Officer of Abel Noser Solutions. “Foreign exchange, which is traded over-the-counter and largely unregulated, remains one of the least transparent financial markets. In the wake of regulatory bodies fining several banks for FX market manipulation, clients are increasingly scrutinising trade analytics to ensure their custodial banks are acting in their best interests.”