eflow (UK) Limited
- Portfolio Company: eflow (UK) Limited
- Date of Initial Investment: 11 April 2008
- Round of Financing: First Round
- Sector: Software
- SWVF Role: Investor
A Wells based company which develops software for the banking and financial industry has secured £330,000 from the YFM Group managed South West Ventures Fund. The funding will enable eflow (UK) Limited to take advantage of a growth in demand for specialist software by financial traders following the introduction of the Markets in Financial Instruments Directive (MiFID).
eflow’s TransacTzar software provides evidence that a trading firm has achieved ‘best execution’ and has complied with the new European MiFID regulation. It does this via a comprehensive transaction monitoring platform that re-creates and stores the market conditions, trade by trade. The software is considered by Thomson Reuters (a shareholder and partner in the business) to be a unique product in terms of its flexibility and functionality. TransacTzar can be deployed in the five main asset classes: equities, foreign exchange, money markets, commodities and derivatives.
The MiFID regulations cover all companies trading financial instruments, including banks, investment banks, broking houses, market data companies, trading platforms and exchanges. The Directive requires all financial institutions to adhere to a code of best execution – taking into account price, venue, cost and speed – and to demonstrate transparency, retaining concise details of every trade for a period of five years.
eflow was founded in 2004 by Marsha Parker, who developed the successful PATH (Peer Application Transaction Hub) technology, which carries out much of the workflow between trading and settlement systems. Users include the Co-operative Bank and Hypo Vereinsbank; PATH has enabled Hypo Vereinsbank to move from 800 trades a day and 20 back-office staff to more than 6,000 trades a day and just five staff.
TransacTzar uses PATH technology to create a trades-based data model which sits alongside the trading software used by financial institutions, ‘listening’ to and recording all transactions to create a detailed record and to match this against real-time pricing data. The software then reconciles each trade and measures whether the transaction achieved best execution, ensuring compliance with the MiFID regulations and the creation of a full audit trail for FSA purposes. The results are displayed on a ‘dashboard’ that highlights any exceptions; the trader will note on the system the reason for the exception, which is then passed to the treasurer for authorisation or further action.
The technology is delivered by a hosted application service provider via the internet on a fee-per-transaction basis and as such is suitable for both small and large users.
Website: www.eflowglobal.com
