If a sell-side firm receives a RFQ from the buy side, the broker would benefit by understanding how the investment manager framed the competition among dealers, whether it be price, size, longer-term trade performance, or other metrics.
When a buy-side client partakes in price discovery, speed matters for the sell-side firms who want the business. An investment manager may want a response to an RFQ in 30 seconds, or 15 seconds, or even 3 seconds; whoever responds first has the pole position to get the trade, and getting back an hour later with the best price is in all likelihood a futile exercise.
Whereas the technology of a decade ago wasn’t up to speed as far as responding, the technology of 2020, for example the Bloomberg Electronic Trade Order Management Solution (ETOMS), enables rapid-fire responses via a digitized platform. And being that most buy-side firms outside of a small subset of ultra-large investment managers don’t have the resources to fully automate, they need partners on the sell side who can provide the data, analyses and insights they need, very quickly.