Goldman Sachs launched a new program last week to clarify its relationships with external vendors, brokers and service providers so as to enhance their clients trade workflow throughout the execution and clearing process.

The firm’s new Global Signature Program, which has its own Web portal, establishes a framework around the full suite of functionality that the firm’s institutional clients can access through Goldman’s electronic trading offering.

With buy-side firms and hedge funds bombarded with dozens of DMA solutions, brokers, exchanges, crossing networks and trading tools in the market, the Web site brings together all the providers in a single place, which the clients can access through their electronic trading relationship with Goldman Sachs.

“We do a lot of things with respect to REDIPlus and connectivity and we have a lot of relationships around the street and with the vendor providers. We found that people are asking us for a different things,” says Adam Mazur, global head of connectivity at Goldman Sachs in an interview. “We wanted to formalize how we interact with providers and how they provide access to the firm,” explains Mazur.

Goldman has organized the providers under the following categories: order & execution management, multi-broker network, analytics & decision making tools, data & content providers, risk management, post trade reporting & processing and network & infrastructure services, explains Mazur. Within each category, Goldman has defined different tiers on how it works with each vendor, explains Mazur. There are three levels of Signature partners — Signature, Premium and Standard Provider, which correspond to the level of integration the firm has with the provider.

For example, Linedata is the only Signature provider listed under order & execution management systems. Goldman Sachs is working with Linedata to integrate the REDIPlus blotter and synchronize it with the LongView blotter, says Mazur. ”We’re providing a level of integration you get above and beyond what you would typically get with other order management systems across the street,” he says.

Under the OMS category, Goldman also works closely with Charles River, Fidessa and Macgregor. “They provide us with a significant amount of algorithmic access and multi-broker access. We would consider those premium providers,” says Mazur. However, we don’t have that additional level of integration we’re going through with LongView,” notes Mazur. Additionally, under the EMS heading, Goldman lists Bloomberg, Flextrade, ITG Radical, Reuters, Portware and ITG Triton as premium providers, while ESP is a standard provider, as is Brass, Sophis and TradingScreen under the OMS heading.

Another premium provider that Goldman has in place is AFA, which allows clients to do post-trade allocation across multiple prime brokers across the street. This way if hedge funds have multiple prime brokers, such as Morgan Stanley, Goldman and Merrill, they can allocate trades across each one.

“The premier tier is certainly an aspirational tier,” says Mazur. “To get it, means these people have very tight relationships with us,” he says. Of the 20 providers participating, Goldman currently has three that earned the Signature distinction – namely Linedata, Axioma in the analytics & decision-making tools and AFA. But areas like data and content providers and risk management don’t have a Signature provider right now. “There’s no guarantee we’ll get one,” says Mazur. “We ‘re not proactively looking to fill out each category and have 20 names,” he says. But the firm does anticipate having five or six Signature providers within the next six months, he says.

“The motivation is to provide our clients with best-of-breed access to vendors for the entire suite of businesses they’re in and to enhance the concept that Goldman Sachs is an open firm, “ says Mazur.
The program is mean to benefit clients, Goldman Sachs and the vendor, he emphasizes. “To the extent that this encourages the firm to work with our clients and provide that extra level of integration that could be a good thing,” he says.

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