By the time most broker-dealers fully assess the cost of TRACE reporting, the conclusion is clear: manual processes aren’t sustainable, and enterprise platforms are often misaligned with their needs.
So what’s the alternative?
In my experience working with small and mid-sized firms, the answer isn’t bigger systems or more headcount. It’s right-sized automation built around how your business actually operates.
Automation provides firms with efficiency and reduced risk. When reporting relies on manual steps or disconnected systems, firms are exposed to:
Even strong teams struggle to stay consistent under these conditions. Automation replaces reactive reporting with a controlled, repeatable process.
Automation doesn’t require replacing the systems you already rely on. For most firms, the goal is simple: Capture trade data once > validate it early, and move it seamlessly through reporting.
That typically includes three components:
Automated trade capture: Trade data flows directly from your OMS or blotter into the reporting process, eliminating re-keying and reducing the risk of manual errors.
Real-time validation: Trades are checked against FINRA specifications before submission, catching issues early instead of during the reporting window.
Exception-based workflows: Routine trades are submitted automatically. Teams focus only on exceptions that require attention.
When firms follow these three elements, reporting processes become more reliable and easier to manage.
One thing to remember though is that not every firm needs the same level of automation. The right approach depends on trading volume, team size, and internal resources.
In most cases, the majority of firms fall into one of three categories:
1) <50 trades/month: lightweight or semi-automated workflowsAutomation should always align with your firm's data volume and complexity.
Many firms also assume that automation means adopting the same large platforms they’ve used for years. The challenge is that these platforms were designed for institutions with multi-asset trading desks or large operations teams.
For smaller broker-dealers, that often translates into:
In other words, the cost and complexity of the solution can outweigh the benefits.
When evaluating automation options, the most effective solutions tend to share a few characteristics. The must-have capabilities to look out for should be:
Equally important, but often overlooked is:
The goal isn’t to find the most feature-rich platform, but rather to find the one that fits your operating model.
One of the biggest changes were seeing across the industry is a move toward connectivity-first architectures.
Instead of one system doing everything, firms are introducing a layer that connects OMS/EMS, regulators, and clearing firms, normalizes data across systems, and supports multiple workflows through one integration. This reduces duplication, improves consistency, and makes change easier.
Platforms like Gresham’s Connect Cloud help firms streamline regulatory and post-trade processes without the overhead of traditional bundled systems.
When firms implement right-sized automation, the impact is immediate. They will instantly start to see:
Compliance then becomes something your team can rely on, without it being something you’re constantly managing.
Ultimately, automation doesn’t have to be complex or disruptive. In many cases, the biggest gains come from improving how data flows, and not from replacing every tool. Firms that take this approach reduce operational burden while maintaining full regulatory confidence.
In the final article in this series, I’ll look at how firms are taking this one step further, treating compliance not just as a requirement, but as a capability that supports growth.
Because once reporting is under control, it stops being a constraint and starts becoming an advantage.
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This is Part 4 of our 5-part blog series. Stay tuned for Part 5.