New York, NY - According to industry sources, Boston-based State Street, recently acquired commission management software vendor, Financial Sockets for an undisclosed sum. 

Financial Sockets is one of a small number of specialized providers who develop and maintain software to help long only asset managers and hedge funds manage their broker vote or commission allocation process.  Some of the major players in this space include:

• Cogent Consulting
• Eze Castle (now part of ConvergEX)
• Financial Sockets
• Rontech

The commission management software business has exploded in recent years, particularly in the wake of the FSA's move to mandate that money managers provide transparency on how much of clients' commissions they are spending on execution and research.  As a result, many buy-side firms have seen a need to purchase systems that can help them justify how they are spending their clients' commissions.

Financial Sockets was founded in 2000 when it became clear that regulatory developments and competitive forces would result in the unbundling of research costs from execution services.  Starting in 2001, the FinancialSockets’ team succeeded in developing a number of tools designed to support and enhance all aspects of commission management.  Some of these products include:

BrokerSelect: a global web-based broker evaluation system;
Q.I.D. Scores:  a research cost analysis metric;
BrokerPort: a global portal for registering broker/dealer analysts in order to insure accurate evaluations and to provide better feed-back to research providers;
RECAP - Research and Execution Cost Analysis Platform: a system that addressed the specific mandates of the UK's CP 176 for transparency in reporting commission utilization in an unbundled environment.

While most of the Financial Sockets team will continue on with the new management, Ellen Hunt, a co-founder and the former CEO of the firm will be moving on for personal reasons.  Consequently, co-founder Robin Howard, will be taking over as the new CEO of the firm.