Order Management Systems / Execution

Transcription

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Order Management Systems /
Execution Management Systems
TRADING STRATEGIES, INTEGRATION
AND IMPLEMENTATION
A Supplement to Traders Magazine,
Produced by SourceMedia’s Custom Publishing Group
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TRADING STRATEGIES, INTEGRATION AND IMPLEMENTATION
EMS and OMS
Innovation Abounds
Management systems of both the “e” and “o” variety are becoming
indispensable tools in traders’ ever-intensifying quest for best execution.
This flourishing sector’s rapid evolution is both driving and responding to
market dynamics, and its various business models present unprecedented
opportunities for traders.
Confusion erupted when EMS and OMS providers began delivering
similar functionality in their platforms. However, that confusion is giving
way to understanding the wide array of choices available. Traders are finding
that, despite growing similarities and the emergence of fully integrated
platforms, important distinctions between EMS and OMS remain.
Contents
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Advanced Financial Applications, Inc.
Bloomberg Execution Management System
Charles River Development
Eze Castle Software LLC
Fidessa LatentZero
Investment Technology Group, Inc.
InfoReach, Inc.
Portware LLC
Townsend Analytics
UBS Direct Execution
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William Butterfield, TowerGroup senior
research associate, points to each
system’s original goals as an enduring
key differentiator. Order management
systems, a paper-blotter replacement
to track trading activity and orders, are
primarily compliance-based. Execution
management systems, which originated
with day trading and rapidly migrated
to electronic institutional trading, are
focused on real-time trading, real-time
market data, and analytics.
Both types of systems have grown far
beyond their roots. “From my perspective,
the choices that are available are outstanding right now,” says Robert Hegarty,
TowerGroup managing director, Securities
& Investment and Insurance.
Today, independent EMS vendors and
broker-owned EMS platforms are engaged
in cooperative competition, propelling
innovation to new heights. Typical systems include a trading blotter, connectivity,
multiple destinations, and real-time data.
Buyside and sellside OMSs are adding EMS-like functionality. In turn, EMSs will
continue to innovate, predicts Hegarty. “The
EMS providers are in a constant state of
reinventing themselves and I think that
they’ll actually do things to try to widen the
gap between what they do and what the
order management systems do,” he says.
Many firms employ multiple EMSs
and an OMS. Firms’ tendency to use an
EMS or an OMS largely depends on the
complexity of the strategy employed and
the frequency of trading, according to a
January Aite Group research report. As
the frequency of trading increases and
the per-share expected profit goes down,
there is an increase in the importance of
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customized functionality.
Aite co-founder and managing partner
Sang Lee says while it’s not clear that a
fully integrated EMS and OMS is the right
solution for most people, “The clients
have already spoken to a certain degree
saying, we’re interested in having a single
platform, a single screen that will help
us manage our trading needs. That’s why
we’ve seen a lot of effort on the part of
broker-dealers to develop a single-dealer
platform and at the same time, adding a
lot of new functionality and connectivity.”
Butterfield offers a different point
of view: “TowerGroup sees increasing
convergence between the EMS and OMS
in peripheral functionality but does not
expect them to merge into one integrated
system because the platforms’ core
offerings serve different purposes and
constituents.”
Ultimately, clients will determine the
winning models. With an abundance of
choices, they must truly understand their
own unique requirements, say the experts,
and then determine which solutions best
match their trading strategy. Hegarty also
advises firms to look beyond each vendor’s technology and functionality to the
stability of the company and soundness
of its strategic plan.
Aite’s Lee sees traders becoming more
educated and more sophisticated in
terms of what kind of tools and services
they need to achieve best execution. The
firm estimates overall spending on EMS
and OMS applications totaled up to about
$1 billion in 2006 and that it will steadily
increase each year, with a projected $1.2
billion OMS/EMS tech spend by 2010.
“Most of the clients are actually look-
ing for a platform that can essentially
grow with them,” says Lee. “You see so
much emphasis and development effort
coming from some broker-dealer EMSs
and certainly OMSs who are able to
support multiple a set classes across
different regions, and different international markets, so that as the client base
becomes more sophisticated, they’re able
to support that growth and make sure
that clients themselves won’t have to add
another screen just to get another asset
class or another international market
added to their overall scope.”
Other factors weigh heavily on decisions
as well. “We’re seeing more of a
proliferation of dark pools in the U.S., in
North America, and also going forward in
Europe with multi-lateral trading facilities,”
says Hegarty. “There will be more pockets
of liquidity besides just at the exchanges.
Having connectivity to all of these venues
will be of great importance for the EMS
and OMS providers.”
Lee points to the “chronic demand” for
measuring performance. “It certainly is
another product area that’s fairly tightly
integrated with EMS and OMS to try to
figure out, now that we’ve been given
a lot of these sophisticated tools and
services, how do we know that we’re
going to get the right type of performance.
So tying that back to performance
measurement with TCA tools and so on is
incredibly important,” he says.
Another important issue going forward,
says Butterfield: “Integration between the
OMS and the EMS, making sure that data
that’s entered into one system is replicated and available in the other system
in real time.” N
A Supplement to Traders Magazine, Produced by SourceMedia’s Custom Publishing Group
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Order Management Systems / Execution Management Systems
AFA’s Perspective on the
EMS vs. OMS Debate
Profiability And Performance In Today’s Trading Environment
In today’s environment, profitability and performance continue to be the fundamental drivers for traders. Underlying this
profitability and performance is the ability to access liquidity and execute against it in a cost-effective way. Technology has
proven itself, over the last decade, to be a key element in a trader’s ability to access, execute and manage trades. How a trader
decides on which technology to use for order execution and order management is increasingly complex. The industry has seen
numerous technology solutions, beginning with the automation of the back office some 15 years ago, and the development of
order management systems in the 1990s. As traders’ needs have come to be more precise, technology firms have responded,
resulting in trade execution tools (e.g., algorithms, transaction cost analyses, etc.) and order management systems (e.g. trade
allocations). In addition, advances in technology (from enterprise software to hosted software) have left many users with
legacy systems which continuously need to be either integrated or updated.
One of the great debates revolves around the issue of
integrating and migrating trades from front-end execution to
back-end clearing and settlement — to manage trades
throughout the trading process. Most software providers have
taken a “siloed” approach to the process, focusing on one
aspect of trading, for example, either an execution management
system (EMS) or an order management system (OMS). This is
an approach based more in technological capability than on
trader need. In this way, the great EMS/OMS debate is irrelevant
because it focuses more on the technology than on the underlying
forces that drive trading behaviour. The real issue underlying the
EMS/OMS debate is not which system is the best but which one
addresses workflow seamlessly without commingling different
applications.
Technology Needs to Adapt to Trading, Not the Reverse
AFA’s approach to technology recognizes this dynamic in
trade workflow and accounts for trader requirements. Our
approach has been to build our technology based on how a
trade happens from trade execution to allocation to interactivity
with third parties. This approach automates the entire trade
workflow (execution and processing) and seamlessly allows the
user to access all three capabilities via a single, web-enabled
application.
Another key issue behind the EMS/OMS debate is neutrality
and independence. Neutrality is the ability to access multiple
brokers, as needed and appropriate, and it means giving the
users the ability to control their trades both from trade execution
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and trade processing perspectives. This neutrality is tied to the
need for vendor independence. As a firm not held by a broker
or bank, AFA acts as a strategic vendor with clients, using our
client-focused technology to build their businesses.
Historically, the marketplace has “pigeonholed” vendors into
either the EMS or OMS category. This is because most vendors
have focused their entire business on one specific aspect of
trade workflow as opposed to the entire trade workflow. Given
that there is an increasing user demand for an OMS that can
also deliver EMS functionality (and vice versa), vendors are
now trying to patch together a combined solution, and brokers
with captive EMS solutions are trying to work with various OMS
vendors. However, this integrating of different applications may
serve the needs of the suppliers but is unlikely to be as efficient
as one built as a combined EMS/OMS from its inception.
Who We Are and What We Do: Simplifying Trade Workflow
Advanced Financial Applications, Inc. provides a suite of
Integrated Order Processing (IOP™) solutions to institutions
and hedge funds, either directly or through broker--dealer
sponsorship. AFA’s flagship product, IMPACT Pro™ simplifies
trade execution and order management.
IMPACT Pro is an integrated, truly broker-neutral technology
solution that helps clients achieve a seamless trading
environment by taking a trade from execution to settlement in a
single entry. More importantly, IMPACT Pro provides maximum
trading flexibility while streamlining trade workflow, resulting in
lower operating costs for users.
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Pat Lynch
Nilesh Nanavati
CEO
President
Key Features of AFA’s Product Suite:
• US Equities and equity options
• Ability to access multiple brokers from a broker neutral platform
• List trading
• Charting, IOIs and commission management
• Access to multiple broker algorithms
• Trade allocations and compliance reporting
• Automated post-trade reporting to multiple prime brokers
• Position management and import/export of positions with
multiple prime brokers.
Conclusion
The question of where EMS/OMS systems are headed
ultimately depends on understanding trade workflow and being
able to bring efficiency (through technology) at each function
within that workflow. Rather than focusing on EMS/OMS, the
industry is better served by focusing on solutions that promote
integrated trade order processing while bringing trade workflow
efficiency. N
Key Benefits of AFA’s IMPACT Pro™:
• Minimum set-up and installation costs — FIX-enabled,
fully-hosted application
• Maximum flexibility and cost-savings through neutral
multi-broker access
• Operating efficiency through seamless trade allocation,
middle office reporting, and position management
• Best practice through compliance tools that offer
increased transparency. Multi-prime broker connectivity
for greater autonomy.
• No switching costs and lock-ins with service providers
• Ability to receive orders from other execution
management systems.
Advanced Financial Applications, Inc. is a financial
services technology company that provides a suite
of Integrated Order Processing (IOP™) solutions to
buy and sell-side institutions. AFA helps hedge funds,
asset management firms, broker dealers and family
Who We Serve
Mid-tier broker dealers find that their ability to compete
with bulge bracket firms is hampered by their inability to offer
value-added trading technology solutions to traditional money
managers and hedge funds. By offering these firms the ability
to provide a differentiated solution (which integrates trade work
flow), AFA helps to level the playing field.
At the same time, EMS/OMS needs vary by market segment.
Small funds typically are captive to the EMS provided by their
prime brokers. As the fund grows to a mid-size fund (less
than $1 billion AUM), it requires a flexible, neutral application
that can allow trading and prime connectivity with multiple
brokers. Larger funds ($1 billion plus in AUM) either create
something proprietary or invest a significant amount of money
in purchasing a high-end EMS/OMS solution. The fact that
AFA’s technology solution is built on trade workflow rather than
specific functionality (such as that related to front, middle or
back office processes) allows it to service all three segments.
offices grow their businesses by creating and delivering
trading solutions to streamline trade workflow,
thus resulting in lower operating costs. For more
information, visit AFA online at www.afapp.com.
Advanced Financial Applications, Inc.
111 Broadway, Ste 405
New York, NY 10006
www.afapp.com
Nilesh Nanavati
President
[email protected]
212-286-1248
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Bloomberg Execution
Management System
The wish list of a buy-side trader seems never-ending. Buy-side traders want: a feature set which includes broker neutral access
to the most broker, algorithmic and dark pool destinations available; global support on a multi-asset, multi-currency platform;
pre-trade cost estimates from leading dealers, working trade analytics, benchmark comparisons in real-time and robust post-trade
TCA reports for management reporting and regulatory requirements; to fulfill their best execution requirements without conflict,
with no additional cost to the buy-side and no per customer connectionor trading fees for any participant which ultimately affects
commissions and fund performance.
The Bloomberg Execution Management System (Bloomberg
EMS), launched in 2005, provides a multi-broker global equity
and fixed-income trading tool that combines data, trade-blotter
analytics and extensive order routing options to Bloomberg users
via EMS<GO> on the BLOOMBERG PROFESSIONAL® service, at
no additional cost to users.
Bloomberg EMS buy-side traders can create their own custom
trading blotters as well as use the wealth of real-time pre-trade,
working and post-trade analytics that can be custom designed, or
rely on the vast library of pre-defined benchmarks. The platform
also provides a real-time sorting and filtering option that enables
traders to identify orders that need special handling versus the
selected benchmarks. Orders can be routed to more than 1,000
broker-dealer destinations globally.
Pre-Trade Decision Support
The extensive analytic capabilities of the BLOOMBERG
PROFESSIONAL service are expanded within the Bloomberg EMS
service. Bloomberg EMS users see critical market data, % of
ADV, VWAP calculations, Natural IOIs, estimated market impact,
deviation from benchmarks and custom risk metrics within
their EMS blotters. Running the broker ranking application via
RANK<GO> on the BLOOMBERG PROFESSIONAL service, users
can view the top brokers by volume in each stock, over custom
time frames.
Broker neutrality reaches beyond routing destinations.
Bloomberg provides pre-trade cost estimates from premier
broker-dealer providers and allows users to integrate the dealer
estimates clients find useful into their workflow. These cost
estimates allow users a new way of identifying tough orders; a
way that far surpasses conventional methods such as ADV.
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Additionally Bloomberg provides IOI Live to enable anonymous
authentication of Natural IOI size and price to brokers preferred
customers. IOI Live caters to the buy-side demand for natural
block liquidity and the increasing need to pay preferred brokers.
Bloomberg EMS augments this process by matching critical IOI
content with the trader’s orders on their EMS blotter. A buy-side
firm can utilize a filter to see all IOIs or Naturals, only from the
dealers they trust. Further filters can be utilized to highlight the
content on high market impact orders or high % ADV orders all
via Bloomberg EMS.
Global Order Handling and Routing
Bloomberg EMS provides connectivity to over 37 algorithmic
providers and enables brokers to deploy algorithms overnight.
Users can be enabled for algorithms intraday, providing a quick
turnaround to their client base. Recent enhancements support
more algorithmic fields per strategy and more strategies
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Don Carey
per provider. Bloomberg is an active participant in future
development in this space through involvment with the FIX
Protocol’s Algorithmic Trading Working Group.
Bloomberg provides breadth, speed, reliability and pricing
in Bloomberg EMS, bringing together buy-side and sell-side
organizations globally without per connection fees or commissions.
With over 1,500 FIX and non-FIX broker-dealer and algorithmic
destinations available to EMS, participation is robust in Asia,
Europe and the Americas. Bloomberg is committed to continued
enhancements to handle and route additional asset classes, as
well as integration and connectivity to dark pools and Alternative
Trading Systems.
Order Management Systems and Workflow Integration
Bloomberg EMS seamlessly integrates with 3rd party and
Proprietary Order Management Systems. Traders typically stage
orders from their OMS to the Bloomberg EMS using the widely
popular FIX protocol. Orders are received via FIX, scrutinized
and sent to the destination of choice. Broker executions are
passed to the OMS, automating the process of reaching liquidity.
This straight thorough processing greatly reduces errors and
simplifies trader workflow.
These capabilities also exist for non-FIX brokers, and have
proven significantly beneficial for emerging markets, Latin
America and parts of Asia. Bloomberg EMS has powerful and
flexible import/export functionality. Single orders and baskets
can be imported to Bloomberg EMS from MS Excel or text
files either through manual drag-and-drop or on an automated
basis. Order, trade and audit trail information can be exported
on a manual or automated basis out of Bloomberg EMS to be
disseminated to back-office and prime brokerage systems.
Post-Trade Analytics and Transaction Cost Analysis
Bloomberg Transaction Cost Analysis (BTCA) provides
post-trade transaction cost analysis to analyze broker, trader,
market and sector performance, for all transactions through
Bloomberg EMS. BTCA combines execution data in Bloomberg
EMS with Bloomberg’s industry standard market data to not
only provide statistics on the trading process, but also provide
the forensic capability to identify underlying circumstances
behind the trade.
With multiple benchmarks,trading desk aggregation,grouping,
sorting and filtering, reports are fully customizable. Presentation
quality reports are available to fund boards, portfolio managers
Kevin Young
and compliance officers. Detail can be viewed on the order, route
and execution level. BTCA is a complete solution for any firm
that wants to measure and improve their transaction costs.
Bloomberg EMS was awarded “Best Execution Management
System” by Waters Magazine for the second successive year in
2007. With the largest community of users, Bloomberg EMS
is a global, broker neutral, stand alone Execution Management
System as well as a core component of the Bloomberg
POMS platform. Bloomberg EMS is accessible to Bloomberg
users via EMS<GO> on the BLOOMBERG PROFESSIONAL service;
leveraging all the analytics, routing network, integration and
providing post-trade TCA via BTCA<GO> on the BLOOMBERG
PROFESSIONAL service. N
© 2007 Bloomberg LP. All rights reserved.
Bloomberg is a leading financial information services,
news and media company. Bloomberg provides
real-time news, financial and market data, pricing,
trading, news and communications tools in a single
integrated package to customers around the world
through the BLOOMBERG PROFESSIONAL® service
and media services. Bloomberg’s media services
include the global BLOOMBERG NEWS® service, the
24-hour business and financial BLOOMBERG TELEVISION®
service, BLOOMBERG RADIO® services, BLOOMBERG
MARKETS® magazine and BLOOMBERG PRESS® books
for investment professionals.
www.bloomberg.com
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Stand Alone or Integrated
The Charles River Investment Management System (Charles River IMS) is a comprehensive front- and middle-office software
suite for all asset classes. It combines state-of-the-art and industry standard technologies to ensure an open, flexible system that
is scalable, functionally rich, and easy-to-use and integrate.
Charles River IMS incorporates real-time electronic trading via FIX through the secure, private Charles River Network based on
the BT Radianz global financial extranet. Comprehensive FIX Network Service includes: FIX trade support; FIX network and
software management; FIX testing and certification; and connectivity management
Charles River IMS provides complete trade-cycle support and
features several modules to lower costs and risk while increasing
operational efficiencies, including:
• Charles River Manager for decision support, portfolio
management and modeling
• Charles River Trader for order management and
electronic trading
• Charles River Compliance for real-time pre-trade,
post-execution and end-of-day compliance monitoring
• Charles River Post-Trade for centralized management of
trade matching, confirmation, and settlement workflow
• Charles River TBA Mortgage for automated and
streamlined delivery and settlement of MBS pools
• Charles River Anywhere for secure monitoring and
management of Charles River IMS information via any
Web-enabled device
• Charles River Execution Management System (Charles
River EMS) for management and execution of orders.
The heart of Charles River EMS’ capabilities is the real-time,
user-configurable trading blotter that allows traders to efficiently
and easily manage and execute orders. Users have access to
advanced and easy-to-use functionalities such as user-defined
algorithms, profiles, strategies, real-time market data, analytics,
risk, news and other context sensitive information — from a
single desktop.
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Charles River EMS provides all of the tools buy-side traders
need to manage their single stock and list trading processes,
including algorithmic trading, pre- and post-trade transaction
cost analysis (TCA), direct market access (DMA), automated
order routing, access to real-time pricing and market depth and
program trading.
Algorithmic Trading
• Easily integrate custom developed sell-side algorithms
into the Charles River IMS — without the need for
additional software upgrades.
• Access over 200 equity algorithms provided by 30+
algorithmic brokers.
Pre- and Post-Trade Transaction Cost Analysis (TCA)
• Charles River has integrated partnerships with 4 pre-trade
and 4 post-trade TCA providers.
• Integrate pre- and post-trade TCA directly into the order
blotter, making data immediately accessible for analysis
and routing decisions.
• Easily navigate to additional value-added content by
simply clicking on an individual order within the
trading blotter.
Direct Market Access (DMA)
• Charles River has integrated partnerships with
9 DMA providers.
• Integrated DMA to ECNS, ATSs, dark pools and
broker algorithms.
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Tom Driscoll
Vice President Sales and Marketing
Automated Order Routing
• Route orders automatically by leveraging Charles
River’s advanced FIX auto-routing that evaluates the
characteristics of an order as it is being sent and routes
with appropriate instructions to the broker of choice.
• Charles River IMS is completely broker independent,
allowing Charles River to route to hundreds of brokers for
Algorithmic, DMA, Program or Care orders.
• Leverage a “one-stop” point of control and support for EMS
and FIX. Route orders to more than 1,200 global brokerdealer destinations that are on the Charles River Network,
or to other third-party broker-dealers’ algorithmic trading
offerings or block trading desks.
• Direct orders to the broker of choice via a single click.
“Charles River EMS is not ‘EMS light’ — it
is a global multi-asset class system that is
truly broker independent. Clients have the
flexibility to leverage Charles River EMS as
a tightly-integrated module of Charles River
IMS for end-to-end functionality and STP,
or as a stand-alone product.”
Charles River Development is an award-winning provider
of technology systems and services for investment firms
in the institutional, mutual fund, banking, hedge fund,
wealth management, insurance and pension industries.
As of June 30, 2007, Charles River supports more
250 clients in 30 countries with comprehensive and
innovative products and services that enhance their
business and that of their customers. Recognizing
the strategic importance of local knowledge and
experience to meet clients’ needs, Charles River
maintains headquarters in Boston, regional offices in
London, Melbourne, Paris and Singapore and has a local
presence in major financial centers around the globe.
Real-time Pricing and Market Depth
• Integrated market data via partnerships with Reuters,
Bloomberg and 12 real-time data vendors.
• Monitor real-time pricing directly within the order blotter
or leverage data to track implementation shortfall of a
particular order or program.
Charles River is recognized as the leading investment
management system provider in terms of user
satisfaction, cost efficiency, reliability and speed.
The firm complements its software with a full range
Program Trading
of implementation, hosting, remote management
• Create, trade, monitor and update programs.
• Act on an entire program as easily as a single order.
Future Releases
• Watch Windows for tracking an individual portfolio or
individual securities for which no orders currently exist.
• Trade interactively with complete market depth.
• Enhanced EMS capabilities for building and customizing
user-defined algorithms directly within Charles River IMS.
• Extended profiles and strategies, market data integration,
DMA and smart order routing capabilities.
and consulting services.
Charles River Development
7 New England Executive Park
Burlington, MA 01803
Jennifer A. Duggan, Sales Executive
+1.781.238.0099; +1.781.238.0088 fax
[email protected]
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It’s All About Workflow!
Introducing A Single-System Solution For Order And Execution Management
OMS and EMS platforms are converging on the desktop. It’s no secret. The buy-side wants it. Industry consultants, vendors, and
the press are talking about it. But, the real story, the driver behind this convergence, is workflow — specifically, streamlining the
number of steps required to quickly put an order into the market without sacrificing functionality. Historically, the OMS and the
EMS have co-existed on the desktop linked through a FIX interface. These interfaces, however, have limitations that force the trader
to choose either the robust functionality of their OMS or the execution speed of their EMS. The only way to offer traders both the
speed they crave and the functionality they need is by going beyond FIX integration and creating a single-system solution. This is
the next logical step in the evolution of the OMS.
The Swivel Chair
Historically, traders have had a choice of two workflows when
using an OMS and an EMS; both suffer from the Swivel Chair
Effect. In the first workflow, order staging, the trader leverages
the functionality of his OMS to generate an order and send it
to the EMS. Through the OMS the trader will model the trade,
run it through risk and compliance, and pre-allocate it to the
appropriate accounts. To stage the order, the trader then fills
out a ticket, sends it to the EMS, swivels to the EMS screen,
accepts the order, and routes it to the market. In a world where
time is measured in milliseconds, this staging workflow adds
many seconds to the total execution time. Modifying the order
is equally cumbersome, requiring the trader to swivel back to
the OMS, adjust the order, and then send the change to the
EMS where he accepts it and sends it into the market. Failure to
follow the proper process can result in a mis-matched order and
a broken link between the OMS and EMS.
“The key to the approach is
putting it all together as one
single-system: one blotter,
common functionality, with a
consistent look-and-feel.”
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The second option is what we call “Cowboy Mode”. In “Cowboy
Mode”, the order originates in the EMS. This workflow is fast,
allowing the trader to quickly get an order into the market, but it
bypasses key functionality of the OMS such as compliance and
position checking. In this mode, it is easy to imagine overselling
a position or violating a compliance rule and not discovering the
issue until after the order is executed.
The Challenge
With two separate systems on the desktop traders are always
sacrificing the benefits of one for the benefits of the other. The
challenge is in how to deliver both. We knew with the right
approach, the right architecture, and the right expertise, this
challenge could be overcome and the OMS could be enhanced
to include EMS functionality.
Our Approach: A Single-System Solution
The key to the approach is putting it all together as
one single-system: one blotter, common functionality,
with a consistent look-and-feel. For example, in a
single-system solution when a trader enters an order
directly in a montage it can seamlessly run through
compliance and position checking; when he modifies
the order anywhere in the system it is instantly updated
throughout the system. This is possible because it’s all
one system — eliminating the challenges of passing
information between two different systems created by
different companies.
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Jeff Gavin
Jeff Shoreman
Electronic Trading Product Manager
Eze Castle Software
COO
Eze Castle Software
Our Architecture: SOA
Eze Castle has been aggressively migrating to an
open and scalable service-oriented architecture (SOA)
giving our platform the flexibility and scale required
of a modern OMS. This architecture will allow us to
enhance our OMS to include EMS functionality without
compromising speed — each component or piece of
functionality can be tuned and scaled independently. In
addition, it allows components of the system, including
The Single-System Solution — The Enhanced OMS
The OMS is the technology hub of the buy-side. As our clients’
investment styles have grown more complex, so has our OMS.
Since our first client went live in 1995, we have seen our OMS
evolve beyond equity order management to become a multistrategy, multi-asset class system enhanced with functionality
to support compliance, commission management, and dynamic
profit and loss. Incorporating global EMS functionality into our
OMS and extending that functionality to support multiple asset
the EMS functionality, to be upgraded independently.
classes is the next natural step in the evolution of the system.
Enhancing the OMS by adding global execution capabilities and
fully integrated real-time market data is the right way to meet
the challenge of delivering both speed of execution and a robust
feature set of functionality for the trader. This new paradigm,
the natural evolution of the OMS, gives the trader access to
EMS functionality in one system, simplifying their workflow and
streamlining their investment process. N
Our Expertise: BNY ConvergEx Group
As with any project, you need to have the right people
in place to quickly and effectively meet your goals. The
execution and buy-side technology expertise across
BNY ConvergEx enabled us to bring to market the first
single-system solution in nine months.
“Enhancing the OMS by adding
global execution capabilities
and fully integrated real-time
market data is the right way
to meet the challenge of
delivering both speed
Eze Castle Software is a leading provider of technology
solutions to global investment managers and a member
of BNY ConvergEx Group.
of execution and a robust
feature set of functionality
for the trader.”
Eze Castle Software LLC
12 Farnsworth Street, 6th Floor
Boston, MA 02210
(646) 346-1140
[email protected]
www.ezecastlesoftware.com
www.bnyconvergex.com
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Fidessa LatentZero Launches the
Market’s First OEMS
by Richard Jones CEO, Fidessa LatentZero
Aligned with the quest for fund performance, and with investors demanding more transparency, the execution quality of buy-side
trading desks is coming under the microscope. In addition, with growing regulatory pressures in the US, Japan and Asia, and the
introduction of MiFID in Europe with its prescriptive client order handling and best execution requirements, the operational control
of buy-side trading has also come to the fore. As a result, the buy-side is now demanding broker neutral EMS capabilities fully
integrated with the more traditional portfolio management, workflow controls and investment compliance offered by an OMS.
Fidessa LatentZero’s response has been to create a solution
for the buy-side front office that can be delivered in two forms:
the Fidessa LatentZero EMS workstation; and the fully integrated
Fidessa LatentZero OEMS, the market’s first buy-side order and
execution management system (OEMS), combining the full
power of leading OMS and EMS solutions into a single system.
Enhancements made to the broker neutral EMS components
are automatically available within the OEMS.
Support is provided for equities, fixed income, money markets,
foreign exchange and listed and OTC derivatives. The system
can be deployed globally if required from a central server, with
the same real-time performance in all locations, which is an
important product differentiator for the increasing number of
multi-site managers. The Fidessa LatentZero OEMS is used
by small specialist managers, through to the world’s largest
institutional buy-side firms.
Fidessa LatentZero EMS
The Fidessa LatentZero EMS is a web deployed market data
and low latency trading workstation for equities and equity
derivatives, and leverages the software widely deployed by
Fidessa on the sell-side. Real-time data is fed from the Fidessa
LatentZero ticker plants for 50+ global exchanges, including
level 1 and 2 security and index data as well as IOIs, news and
graphs. Execution connectivity is provided to over 200 brokers
and their associated algorithms as well as DMA to all major
global exchanges.
The EMS solution, which is used by over 100 firms globally, is
ideal for a hedge fund or asset manager requiring out-of-the-box,
fully hosted broker neutral market trading, and can be used as a
standalone workstation or connected to any OMS, automatically
receiving orders and sending back executions.
Portfolio Management
FidessaLatentZeroOEMSprovidesreal-timepositionmanagement
and P&L, exposure analysis and drill-down, with flexible support
for strategies. Portfolio managers and traders can generate orders
to suit many investment styles using various techniques across all
asset classes, including listed and OTC derivatives. Orders can be
executed immediately by a manager/trader, or can be routed to a
trading desk located anywhere in the world, 24 hours a day.
Fidessa LatentZero OEMS
The Fidessa LatentZero OEMS is the first system to provide a
complete cross-asset buy-side order management and trading
environment. In addition to the market connectivity and trading
functions provided by the EMS components, the OEMS includes
real-time position keeping and P&L, portfolio analysis and
drill-down, order management workflows, and investment and
trading compliance, and meets the demands of global regulators
and MiFID.
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Pre-trade Analysis
The OEMS provides pre-trade order size analysis and transaction
cost estimates, as well as IOIs, trade history and news to assist
traders in deriving the optimum trading strategy for an order or
list of orders. Level 1 and level 2 data is integrated from 50+
global exchanges, and calculated columns with heat maps enable
traders to set up their own analytics and alerts.
A rules based auto-routing engine enables small or low impact
orders to be immediately routed to any trading destination,
minimizing delay costs and removing “noise” from the order blotter,
allowing buy-side traders to focus on larger, more difficult orders.
Execution Destinations and Strategy
The OEMS provides single-click, low latency connectivity from
the blotter to the 200+ brokers, broker algorithms and global
DMA destinations supported by the Fidessa LatentZero EMS.
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Richard Jones
CEO
Connectivity is also provided to all major alternative trading
systems, such as LiquidNet, ITG Channel and Pipeline for equities;
TradeWeb, Bloomberg AllQ, MarketAxess and Bond Vision for fixed
income, FXAll and FXConnect for foreign exchange, and others.
Multiple execution destinations can be used for a single order,
so for example, a trader could first look for liquidity in LiquidNet
and achieve a 40% match, then place a further 40% of the order
on a VWAP algorithm, and use DMA for the remaining 20% to try
and achieve some price improvement. Such execution strategies
can be saved by traders for re-use.
A comprehensive list trading module provides pre-trade
list analysis, wave management with access to all execution
destinations, and integrated compliance.
Fidessa LatentZero OEMS includes real-time execution
Fidessa LatentZero is a global technology firm that specializes
in developing complete front-office solutions for the buy-side
community. Fidessa LatentZero’s Capstone product is used by nine
of the world’s largest ten asset management organizations, through
to small specialist managers and hedge funds. More than 5,000
portfolio managers, traders and compliance officers worldwide
rely on Capstone to manage assets in excess of $8 trillion.
benchmarks enabling traders to monitor the quality of executions
intra-day. Trades can be loaded to third party post-trade transaction
costs analysis systems, and a full quote history is retained for
quote driven markets, along with hit ratio reports.
Capstone is comprised of three components, all of which provide
comprehensive functionality for Equities, Listed Derivatives, Fixed
Income, Money Markets, FX and OTC Derivatives:
Operational Control, Compliance and Record Keeping
Executions for single and list orders are allocated in real-time
to portfolios and strategies according the client’s allocation policy,
including full commission and charges calculations, with real-time
updates to positions, P&L and cash management functions. Commission target monitoring functionality is included, as well as interfaces
to trade confirmation systems, and all major back office systems
providing seamless integration with downstream processing.
Tight process controls and permission management within
the OEMS, along with integrated investment compliance, greatly
reduce the risk of investment or trading errors. Comprehensive
mandate, regulatory and management restrictions are supported
and checked throughout the investment process, ensuring
portfolios stay within guidelines at all times. Order aggregation
and portfolio/strategy allocation policies can be defined, which,
combined with a full transaction history and audit trail of all
user activity, meet the client order handling, record keeping and
transaction reconstitution requirements of RegNMS, MiFID and
other major regulators.
•Minerva OEMS for order management, trading (EMS) and
Product Direction
An aggressive development schedule is designed to keep the
EMS and OEMS ahead of the competition. Current initiatives include,
amongst others, a continuous stream of EMS enhancements driven
by buy-side customers, and a focus on portfolio management and
trading for fixed income and credit, interest rate and equity OTC
derivatives. N
•Tesseract for portfolio slice and dice, real-time P&L,
strategy management, modeling, what-if scenarios and
order generation.
post trade processing.
•Sentinel for pre- and post-trade investment compliance.
Capstone can be installed as a single system, or any
combination of modules may be implemented. In addition:
•An optional OTC Derivatives overlay module provides
end to end investment workflows and pricing for OTC
credit, interest rate, inflation, equity and currency
derivatives across all areas of the Capstone suite.
•A standalone, web deployed EMS market data and
connectivity workstation can be deployed for clients requiring
out-of-the-box, fully hosted, broker neutral market trading
for global equity and listed derivatives. The EMS can be
connected to any third party OMS.
The Service Oriented, Event Driven technical architecture
(SOA/EDA) which underpins Capstone is state-of-the-art and
works seamlessly with any other front, middle or back-office
technology. It provides a 24x7 high performance solution that is
scaleable, can be implemented globally and is easily integrated
with external systems.
Fidessa LatentZero provides expert assistance with system
implementation, including technical integration, business
process/workflow consulting and training.
Fidessa LatentZero
1 Alfred Place
London WC1E 7EB
Ph: +44 (0) 20 7462 4200
Email: [email protected]
Web: www.latentzero.com
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ITG — Beyond the EMS/OMS Convergence
The true goal of OMS /EMS convergence is to achieve the optimal trader experience traditionally associated with the EMS without
sacrificing the safety and controls associated with the OMS. To achieve this convergence, many investment managers are using
either a vendor who added an EMS to an existing OMS or a multi-vendor solution; however, the use of two systems is inherently
inefficient, forcing the trader to flip back and forth.
OMSs were not designed for today’s sub-millisecond world of
trading and OMS vendors have been slow to respond to the needs
of the modern trader. EMSs, on the other hand, handily deliver
the required performance as well as the tools needed for best
execution; however, they do not address all of the functionality
of the OMS, which increases risks and operational challenges.
It is clear that an integrated system makes the most sense, but
how does one efficiently combine all of the functionality a trader
requires into one system? The technical challenge is substantial
and investment managers must carefully consider each provider’s
consolidation method and experience.
ITG’s approach is to deliver a single tool for the trader where
the historical distinctions between OMS and EMS disappear. ITG
is taking the inherent concepts from each world and delivering
them as an entirely new application that is optimized for trader
workflow and performance and allows the institution to better
manage the entire pre-trade, trade, and post-trade process with
proper audit and control. This new concept, ITG Triton X™, delivers
unified workflow and EMS performance without compromising
compliance, cash, or other constraints.
Today’s traders are faced with increasing demands—to preserve
alpha, reduce impact, and generally increase efficiencies to minimize
costs, while utilizing a multiplicity of systems to do so. Developing a
comprehensive tool that spans the required EMS and OMS functions
is not easy. Many vendors underestimate the technological
complexities of market data management, dealing with trading
restrictions, and isolating compute-intensive tasks from highperformance trading activities. ITG is unique in its ability to deliver
all of the tools a trader requires, integrating data from throughout
the process, as a comprehensive, best-of-breed solution. No other
provider offers the same depth of experience or as many proven
market-leading solutions.
ITG brings to the table years of experience with both OMS and
EMS systems. Since its founding in 1987, ITG has developed
numerous iterations of its EMS and OMS tools. With each new
generation, ITG has improved the trader’s workflow by addressing
client-specific concerns with their daily activities using ITG’s or
other vendors’ tools. ITG Triton X benefits from ITG’s years of
experience in these areas,including the more than 140 person-years
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of development effort expended on Triton®, one of the leading
execution management systems available today, as well as the
proven order management capabilities of Macgregor XIP™. ITG
Triton X melds the best of these applications on a single platform;
ITG has carefully selected the technologies best suited to each
particular function.
Working on a daily basis with traders provides ITG with the years
of experience required to properly deal with trading restrictions.
The largest asset managers, for example, trade thousands of
securities across thousands of portfolios with dozens of rules
constraining each one. OMS products have bogged down under
this load. The ability to break off slow or compute-intensive
functions away from those activities that need to be conducted
with speed is only available to vendors like ITG who control, and
understand, all aspects of the application. For example, a trader
needs to monitor his environment in real-time but doesn’t need
to immediately conduct allocations to particular accounts. With
a unified platform, the allocation process can be off-loaded and
conducted elsewhere so that it can occur in a timely manner, but
without hindering the trader’s performance.
Data management is another crucial component to delivering
a comprehensive OMS/EMS. ITG has been dealing with real-time
market data, and its ever-increasing volumes, as well as historical
data and analytics for decades. ITG intimately understands the
complexities and nuances of efficient data management because
our portfolio trading desk, research teams, and best execution
tools utilize this data extensively. OMSs are not optimized for
the torrents of data needed by today’s traders and managers,
whereas ITG Triton X makes use of an EMS-like architecture that
has been designed to deal with streaming real-time data and
provide the necessary scalability and capacity.
Finally, client participation and insight can also make the
difference in delivering a truly best-of-breed, comprehensive
system. ITG services a wide variety of clients—from hedge
funds trading single stocks to large asset managers managing
thousands of orders. Not only is ITG familiar with the unique
problems of various types of accounts, the firm relies on its close
client relationships for feedback to build and enhance its full
range of end-to-end trading solutions.
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Andrew Larkin
Managing Director
ITG Triton X™
Only ITG has delivered all of the essential pieces to solving
the OMS/EMS puzzle—proven EMS capabilities, market-leading
pre- and post-trade analytics, a global routing network, extensive
intellectual capital, a history of innovative technology, and true
neutrality across brokers, liquidity destinations, and vendors.
ITG Triton X brings them all together in a cohesive fashion and
goes beyond traditional EMS and OMS functions to deliver a
unified platform designed to optimize the trading experience
and revolutionize order management.
Broker/algorithm/vendor neutral
ITG Triton X offers freedom of choice; integrate with your preferred
systems, route to any destination, trade with your selected brokers,
utilize your algorithms of choice.
Proven execution management
ITG Triton X leverages the 140+ person-years of development
effort behind Triton®, one of the industry’s leading execution
management systems, to deliver fast, proven trading capabilities.
Comprehensive trading functionality
ITG Triton X seamlessly brings together order management and
execution management functionality on one platform designed
for maximum speed and efficiency—without staging, re-keying,
or data loss.
Market-leading best execution tools
ITG Triton X seamlessly melds information from throughout the
trade lifecycle by integrating marketing leading tools for pre- and
post-trade analysis, including ITG Logic® and ITG TCA™.
Portfolio management
ITG Triton X builds off the success of the Macgregor XIP™ PM tool
to provide sophisticated modeling, multi-asset class optimization,
and integrated pre-trade analytics.
Enterprise-class compliance
Through ITG Compliance™, ITG Triton X offers central management
of global portfolio compliance activity with integrated real-time
pre-trade monitoring and end-of-day capabilities.
Investment Technology Group, Inc. (NYSE:ITG), is a
specialized agency brokerage and technology firm
that partners with clients globally to provide innovative
solutions spanning the entire investment process. A
pioneer in electronic trading, ITG has a unique approach
that combines pre-trade analysis, order management,
trade execution, and post-trade evaluation to provide
clients with continuous improvements in trading and
cost efficiency. The firm is headquartered in New York
with offices in North America, Europe and the Asia
Pacific regions.
Founded in 1987, ITG was one of the first firms to recognize
the potential of electronic trading and continues to help
clients trade more efficiently and reduce transaction costs
through a combination of technology and client service.
ITG has focused on helping clients better navigate an
increasingly complex marketplace, starting with the launch
of POSIT®, an electronic system for low-cost, confidential
crossing. Recognizing a need in the marketplace for
integrated solutions, ITG added pre- and post-trade analytics
and multi-asset class order management to its product
offering. Nearly 20 years later, ITG remains committed to
providing clients with the same high standard of service
and innovation. For more information on ITG, please visit
www.itg.com.
Global FIX connectivity
ITG NetSM offers ITG Triton X users with global FIX communications
direct from the blotter that are fully managed, fast, secure, and reliable.
Automated, exception-oriented trade processing
ITG Trade Ops™ automates global post-trade securities matching
and settlement communications through tight ITG Triton X
integration and Service Bureau connectivity to the industry’s
post-trade utilities and your financial counterparties.
Investment Technology Group, Inc.
380 Madison Avenue
New York, New York 10017
Email: [email protected]
Website: www.itg.com
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InfoReach
InfoReach was founded in 1995. What began as a consulting collaboration has evolved into
one of the premier software companies within the financial technology marketplace today.
Upon completion of that first consulting project, the company’s
founders both recognized the significance of the FIX protocol
and the future impact it would have on the financial industry.
They decided to launch InfoReach and one of the industry’s first
pre-built FIX engines. For several years, they continued working
on in-depth consulting projects for many well known institutions,
international exchanges, etc. After many years of consulting and
building FIX infrastructures from the ground up, many of our
clients began requesting a front-end GUI which can monitor and
control orders. Recognizing this need, the company quickly built
a tool kit for the rapid deployment of a trading system. This was
in essence the birth of today’s InfoReach TMS trading platform.
In 2002, after many custom deployments, we decided that we
had a formidable enough product to compete with the existing
vendors and we ultimately made the decision to productize the
trading system. Today, we offer two core products, the InfoReach
FIX Engine and TMS. We currently are headquartered in Chicago
with a satellite office in New York that is geared towards sales
and marketing.
Our philosophy and focus have always remained the same, to
evolve while maintaining a high-level of customer satisfaction.
Balancing strong technology and customer demands has been
the key to our success.
The InfoReach TMS was first deployed in 1997. Through the
years our strategy has been to incorporate all customer requested
functionality into the TMS. After ten years of development, we
have the largest set of functionality offered out of the box.
What does this mean to our clients? Most importantly, less
functionality has to be developed by programmers, resulting in
a quicker deployment at a lower cost.
Since day one, we have never charged for set-up of the TMS.
The product itself is a broker neutral execution management
system capable of trading global equities, options, futures
and forex. It is most commonly used buy hedge funds, asset
managers and sell-side program trading groups. Users can trade
single orders or baskets either manually or algorithmically. Key
components would include our custom built algorithms with
which we supply our customers the code. The reason we do
this is so they could customize our algos to meet their needs
with relative ease. The TMS is also integrated with most broker
build a superior technological product. Our products don’t just
look good, they are solidly built and well respected within the
industry. We are confident that people which are serious about
technology and need a product they can trust will call InfoReach.
Recently, a major buy-side firm summed our approach up in one
sentence — “We like InfoReach because unlike your competitors,
you didn’t go out and carpet bomb the industry”.
Our translation, we didn’t go out and bite off more than we
can chew. Aside from technology, we realize that service must
be superior in order to survive on Wall Street. We have grown
the business in a manner which has allowed our products to
dealer provided algorithms. The combination of proprietary
algos and broker provided gives our clients true neutrality with
regard to algorithmic trading.
Other key components are connectivity to the street via
the InfoReach FIX Network, as well as, interactive charting
capabilities. Our interactive charting is important to many of
our clients because when trading a large set of names it is quite
difficult to monitor executions. What we did was create charts
which monitor the orders real-time and allow users to interact
by trading off of the charts. This is useful because traders can
quickly identify and act upon outcast orders, slippages, etc. The
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Allen Zaydlin
CEO
TMS also offers a full suite of pre and post trade analysis tools.
These tools are fully integrated with the execution capabilities
of the system and allow initiation and control of executions right
from the pre and in-trade visual analysis tools.
Users can trade single orders
or baskets either manually or
algorithmically. Key components
would include our custom built
algorithms with which we supply
our customers the code.
InfoReach is an innovative company focused on
providing leading software solutions for the electronic
trading of financial securities.
Established in 1995 InfoReach promptly recognized
industry technology trends and created its product line
The key differentiating factors of the TMS vs. other similar
or competing products is architecture and the amount of
functionality it delivers out-of-the-box to trading firms. We have
been working on the infrastructure components of the TMS
for years making sure we are laying down a robust product
foundation capable of accepting future functionality imposed
by trading. The character of the TMS was greatly influenced by
initial set of requirements and the vision of the environments it
should fit into. Namely, it had to be an enterprise-wide solution
that can be used by majority of traders in the firm, regardless of
their physical location and security types they trade. Therefore,
the core of the TMS is its consolidated and scalable server,
which consolidates trading activity of each trader and strategy
in real-time and it can be scaled across multiple networked
computers to handle increased performance requirements.
Server-centric technology allows achieving greater performance
and reliability as it is decoupled from GUI part that can affect
overall performance.
When you evaluate execution management systems there is
only one fundamental objective you need to keep in mind. An
EMS must get you in and out of positions at the lowest possible
cost. When you add all cost factors such as performance, price
of the product, amount of functionality it makes available,
quality of its support and reliability you will find the INFOREACH
TMS is useful for this very reason. N
of INFOREACH FIX Engine (FIX protocol engine) and
INFOREACH TMS (Trade Management System). Our
products are open, scalable and flexible solutions for
firm-wide order execution and management.
An abundant array of features combined with committed
support have made InfoReach the technology of choice
for many major buy and sell side financial institutions.
InfoReach employs a staff of over 30 industry
professionals in offices throughout the United States
and Europe.
InfoReach, Inc.
80 Broad Street, Suite 2706
New York, NY 10004
www.in4reach.com
Sales
212-269-2722
[email protected]
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Portware — The New Age EMS
Staying ahead of the competition requires a central, robust platform that best fits your growing business and technological needs.
In doing so, it is important to examine three key factors—Flexibility, Scalability/Performance and Anonymity. All of the above
mentioned will allow the buy and sell side trader to take advantage of new opportunities in electronic trading while also allowing
them to adapt to changing market environments. Portware’s open, flexible architecture gives financial institutions to tools to do
just that. It allows for the addition of new functionality and seamless integration with existing infrastructures as well as third party
applications such as risk compliance, order management systems, data feeds and networks.
Flexibility
Businesses are constantly changing and evolving. Given this,
a platform needs to have an open architecture–one that allows
a trader to implement their own unique ideas while seamlessly
integrating with their current environment. This is a system that
is truly flexible in all definitions of the word, no matter how
complex or strict the requirements.
Following the traditional trend of broker-developed algorithms,
the buy-side now has the capability and means to build their
own algos that are more complex and tailored to their specific
requirements. Many realize the key advantages from being able
to control their orders—these include lower market impact and
lower commissions.
Portware’s infrastructure allows for easy implementation/
integration with internal systems, proprietary strategies and
algorithms. We have certifications with over 300 execution
destinations, connectivity with the major market data providers
as well as complete access to algorithmic suites from over 30
individual brokers. The modern trader now has the ability to
control and customize a solution that is unique to them on a
platform that meets the high speed requirements of today’s
environment.
Scalability/Performance
Speed and capacity become important factors as the
electronic trading trend continues. The buy-side is facing rising
expectations to increase capacity and capabilities, and the
trader is expected to focus on how to best capture expected
alpha while minimizing impact. With this demand to control
orders comes the responsibility and need to have a platform
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designed to handle high frequency and capacity. The execution
management system (EMS) has evolved to have both traditional
order-entry/direct market access tools as well as an automated
environment for the trader. These are gaps that the traditional
order management systems (OMS) are not designed to handle.
Portware provides a global, multi-asset trading system which
supports portfolio, single order and automated trading in an
enterprise environment. It gives the trader the ability to once again
take control: maintain a complete audit trail with timestamps,
benchmark and market snapshots, monitor performance and
risk in real-time across many orders, implement their own
algorithms, aggregate multiple sources of pre and post trade
TCA and IOI’s, control their own orders, whether via algos or
DMA, and access all available liquidity venues including dark
pools.
Anonymity
The buy-side is now realizing the advantages of having a thirdparty, broker neutral system. It allows them to utilize algorithms
developed by the sell-side and route them to any destination.
They now have a choice and this means unprecedented control
and anonymity over their orders and execution—key information
can be kept close to the vest. This issue of visibility comes into
play with the many acquisitions by broker-dealers who want to
increase their offerings and position. While the two entities are
kept independent of each other, for compliance reasons, there
is rising concern from the buy-side on the extent to which their
order flow is visible. It is important to evaluate how this relates
to your business.
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Financial institutions now have
the means to control their
complex trading strategies
and risk while having all
information available to them
on one, single platform.
Founded in 2000, Portware LLC is the financial industry’s
leading developer of broker-neutral, automated portfolio
trading software for global equities, futures, options
and FX. With offices in New York, London and Asia,
Portware works in partnership with its clients to
create highly integrated solutions to streamline
workflow and increase operational efficiencies on
Portware is a leading provider of a broker-neutral trading
system that delivers a suite of execution algorithms along
with a platform that allows a trader to easily develop their own
strategies. The neutrality of the platform also gives unrivalled
access to multiple pools of liquidity and unlimited sources
of TCA (Transaction Cost Analysis) from one seamless and
customizable portal. We have incorporated multiple broker and
independent pre-trade cost estimates and post-trade analytics
combined with real-time benchmarking—tools for achieving
and proving best execution. Users now have a real-time, single
view of their trading workflow and transaction costs in order to
execute trades more efficiently, minimize market impact and
improve performance. Portware provides a complete snapshot
of key points throughout the trade cycle which allows extensive
trade analysis of best execution. Financial institutions now have
the means to control their complex trading strategies and risk
while having all information available to them on one, single
platform.
When searching for the trading solution that best fits your
business, the process can be broken down to a few criteria:
flexibility, scalability/performance and anonymity. By looking at
each key factor, you can uncover the needs and find a system
that makes the most sense. In the end, this crucial decision will
help you maintain a competitive advantage over everyone else. N
trading desks worldwide.
U.S. Office
233 Broadway
24th Floor
New York, NY 10279
1.212.425.5233
[email protected]
www.portware.com
UK Office
3 Bunhill Row
London EC1Y 8YZ
020 7083 7171
[email protected]
www.portware.com
Asia Office
Level 39, One Exchange Square
8 Connaught Place, Central
Hong Kong
852 3101 7676
[email protected]
www.portware.com
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Is Your Execution Management System
Keeping Up?
A Revolution Is Occurring In Electronic Trading Technology And You Cannot Afford To Be Left Behind
The electronic financial markets are transforming at light speed
across both “low-touch” and “high-touch” execution models. The
regulatory environment is one catalyst leading the charge via MiFID
in Europe and Reg NMS in the United States,along with the continued
Is my EMS seamlessly integrated with the data and content I need?
More and more EMSs have been designed to integrate
sophisticated streaming data and value-added content alongside
full trading functionality. If you still source the majority of your
electronic evolution of global markets. Execution destinations
are transforming themselves as a result of competitive pressures
brought on by operating as ‘for profit’ entities, through consolidation,
improved technology, enhanced functionality and broadening the
products and services they offer to market participants.
In response, brokers are being forced to provide new products
and services such as sophisticated algorithms and more targeted
functionalities across a broad range of asset classes to help their
valued clients achieve best execution regardless of size or complexity
of an order. Institutional traders increasingly require access to multiple
brokers based on criteria such as service, content, and expertise. And
all the while, quote rates continue to exponentially increase.
As a result, trading grows even more complex, requiring new
technologies to capture market opportunities as they arise--often
in a matter of milliseconds. For many traders, this translates into
multiple terminals on their desks, each with a different purpose
and content. And many still wonder, can’t one common system link
them all together in a single trading platform?
The good news is that the technology is already available. But to
get to where you need to be, you need straight answers from your
Execution Management System (EMS) provider on the following:
data and content from an external application as opposed
to your EMS, you stay a step behind by introducing a level of
“human” latency into the trading equation.
How compatible is my EMS with my OMS?
• Does the EMS offer the flexibility to seamlessly integrate
with my OMS?
• With a multi-broker and multi-asset EMS, does my OMS offer
enough flexibility to pre-designate broker routes across individual
asset classes?
• How flexible is the EMS with various symbologies such as
Bloomberg and RIC codes along with proprietary securities
identifiers used by the OMS?
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What are the speed, breadth and quality of the data and
content I use to make trading decisions?
There was a time in the not so distant past when simply the
availability of “streaming” data more than sufficed to meet the
needs of most traders. Now it’s not even enough to just keep
you in the game. You need data and content of the highest
quality and lowest latency if you want to compete with those
traders already armed with this.
Ask your provider about QPS currently being delivered, their
overall capacity and future expansion plans. Find out if their
technology is scalable or if they need to rebuild it from scratch.
Simply put, if their technology is not state of the art, then you
will not be able to achieve best execution.
Other questions to ask about your provider’s data:
• Where are their data centers physically located?
• Do they provide hubs in other locations?
• Do they automatically scrub the data?
• What connectivity options do they offer to the end-user?
Internet, direct feed, financial extranet?
• Do they offer full depth of book quote display where
available by source?
• Does the full breadth of data encompass multiple asset
classes across global liquidity providers?
8/1/07
4:33 PM
Page 91
Can I trade multiple asset classes across multiple
regions on my platform?
Cross-asset strategies are now the name of the game,
and the days of single- or limited-asset class terminals are
numbered. Exchanges are introducing new products weekly, and
the financial markets are becoming more and more co-mingled
across assets. By choosing an EMS that provides a centralized,
global view of positions across asset classes, P&L and other
critical trading information within a single, tightly-integrated
If your current EMS provider comes up short in a few of the
areas outlined in this overview, it’s time to consider making a
change to the best-of-breed technology you need to thrive in today’s
global markets. Townsend Analytics invites you to explore how
our RealTick® EMS can help you maximize trading opportunities,
achieve best execution and minimize risk across multiple asset
classes. It’s the platform of the future...available now.
platform, you can ensure best execution, limit risk and reduce
mistakes commonly made when trading multiple asset classes
on separate platforms.
www.townsendanalytics.com or email us at [email protected].
Is my trading platform limited to a single broker or do I have
access to a broad network of brokers through a single terminal?
Investment managers today engage in multiple brokerage
relationships simultaneously, both to preserve anonymity as
well as to have access to an appropriate range of specialized
products and services. These can include proprietary research,
analytics, algorithms and specialized execution services. That’s
why a multi-broker, multi-asset trading platform has become
one of the primary demands of the buy side.
For more information, please visit our website
*RealTick is a registered trademark of Townsend Analytics, Ltd.
© 2007 Townsend Analytics, Ltd. All rights reserved.
Townsend Analytics is one of the world’s premier
providers of advanced, integrated capital markets
Is my EMS platform truly broker neutral?
Being multi-broker doesn’t always equate to being “broker
neutral.” To preserve the anonymity of your order flow, ensure
that your EMS provider is truly neutral and is not preferencing
certain destinations or liquidity pools, and maintains separate
locations, staff, infrastructure and networks from that of any
other broker on its network. Be satisfied that controls are in
place to provide full broker neutrality to all customers.
and trading technologies. Townsend offers Trading
Services, Content Data Services, Exchange Services,
and Portfolio and Risk Services for financial institutions
and investors in over 94 countries around the world.
Townsend is the creator of RealTick® EMS, the electronic
trading industry’s premier multi-asset, multi-broker,
and multi-route direct access trading platform.
Summary
Thanks to recent advances in technology, what was once
thought of as the elusive “Holy Grail” for traders has become a
reality. A multi-broker EMS that can integrate data, news, analysis,
direct-access trading and order and risk management tools into
a single platform should now be an essential component of the
buy-side’s trading desk.
Townsend Analytics
www.townsendanalytics.com
Sales
[email protected].
91
8/1/07
4:33 PM
Page 92
UBS Pinpoint Q&A
Will Sterling, Managing Director and global head of UBS Direct Execution, discusses
UBS Pinpoint — the firm’s institutional execution management system.
What is UBS Pinpoint, and why did UBS build it?
UBS Pinpoint is our next generation desktop trading system.
We originally built Pinpoint for our own use on the UBS Equities
desks. As we evolved this EMS, we added functionality making
it an extremely valuable, user-centric offering. It became both a
robust internal system and a valuable, leading-edge platform for
clients. We initially rolled it out to our prime brokerage clients,
and Pinpoint has grown from there. After just 18 months, we
have almost 800 users. Pinpoint is a strong complement to
UBS’s very open vendor connectivity model.
What makes Pinpoint a “next generation” offering?
First, because we created Pinpoint from the ground-up, we
created a platform unburdened by legacy technologies. The
architecture is designed to be incredibly fast and reliable.
Latencies are just 2-3 milliseconds; the overall platform processes
over one million orders each day with that performance. Our
92
Pinpoint developers deliver new functionality to our clients
every month. We’ve chosen not to use a heavy, bureaucratic
development model where one plans and analyzes a release
for six months, then spends another six months fixing the bugs.
We have small, frequent releases which mean fewer bugs and
quick adaptation to changing client demands. Pinpoint also
integrates easily with other systems and is so flexible traders
can design desktops that precisely suits their unique workflow
and preferences.
What is unique about how you developed this system?
At UBS Direct Execution, there is no real distinction
between technology and the business. Our traders understand
technology, and our technologists understand — and often have
been — traders. So Pinpoint doesn’t force traders to accept a
developer’s concept of how they should work. Rather, it gives
traders the control to make the system suit their own needs.
8/1/07
4:33 PM
Page 93
Will Sterling,
Managing Director, Equities
UBS Investment Bank
UBS is extremely committed to technological innovation, and
invests accordingly. Pinpoint doesn’t compromise on the right
design — a discipline that is sometimes quite challenging, but
well worth it in the long run.
What do your clients like most about Pinpoint?
Our clients love that they can login to Pinpoint anywhere in
the world, and are at their own desktop. They like how intuitive
the experience is — clients control the interface — enabling
them to customize layouts and execute quickly. They like that,
through UBS, they can access over 130 markets across the
globe, use the full suite of UBS algorithms, and find crossing
opportunities in UBS Price Improvement Network (UBS-PIN),
our own non-quoting liquidity pool. Clients also appreciate that
Pinpoint seamlessly integrates with their other vendor systems.
A key trend we see among clients is a heightened emphasis
on performance and reliability. While new functionality can
obviously be useful, clients are increasingly less tolerant of
outages and performance issues. Given its speed and reliability,
we think Pinpoint is truly differentiated.
What about the UBS factor: What impact does UBS’s scale
and diversity have on the Pinpoint product?
It’s quite definitely a positive impact. UBS is a global trading
powerhouse — last year, one out of every twelve shares on every
exchange in the world was traded by UBS*. In the US, UBS trades
one out of every nine shares†. That’s a tremendous amount
of liquidity. This deep experience has shaped Pinpoint; we can
transfer our “go to market” expertise to our clients. Pinpoint
is also fully integrated with UBS’s highly innovative algorithmic
trading capabilities. Our clients can leverage the full array of our
liquidity-seeking, price-sensitive, and time-sensitive algorithms
to execute as efficiently and effectively as possible.
So what are your strategic goals for UBS Pinpoint?
Our objective is to make Pinpoint a market-leading, global,
multi-asset desktop trading system. It will evolve to stay ahead
of our clients’ expectations and changing needs. We want to
make Pinpoint available to clients who want the same trading
functionality and access our Equities traders have. It’s not our
goal to “own” every client desktop. UBS Direct Execution has an
open connectivity policy. This client-centric philosophy empowers
clients to access us however they wish — through any of our
third-party OMS or EMS partners, or their own proprietary trading
systems. All of our Direct Execution offerings can be delivered
through Pinpoint or “à la carte” through their OMS/EMS.
You mentioned that new functionality is always being rolled
out: how do clients manage installation of so much new
technology?
Releases are pushed out to clients via the Internet — so
there are no appointments to schedule, and no trader will lose
time waiting for onsite upgrades. The functionality will just
be there the next time they login. Release Notes outline what
changed and how new functionality has widened their trading
capabilities.
What’s coming next? What are some of the near-term plans
for expanding UBS Pinpoint?
We’re dramatically expanding our international trading
capabilities in August, and by year’s end, we are adding many
new instruments including Futures and FX. We’re launching
several analytical tools to enhance the trading process — such
as our pre-trade analytics; our at-market UBS Alerts offering;
and our post-trade tools, which provide consultative insights
to continuously improve our clients’ decision making — and
ultimately — execution. N
* Per exchange-reported statistics, 2006
† Per Autex, 2006
“This material has no regard to the specific investment objectives, financial situation or
particular needs of any specific recipient and is published solely for information purposes.
This material is not to be construed as a solicitation or an offer to buy or sell any investment
instruments, to effect any transactions, or to conclude any legal act of any kind whatsoever.
Not all products and services are available to citizens or residents of all countries. No
representation or warranty, either express or implied is provided in relation to the accuracy,
completeness or reliability of the information contained herein, nor is it intended to be
a complete statement or summary of the developments referred to in this material. Any
opinions expressed in this material are subject to change without notice and may differ or be
contrary to opinions expressed by other business areas or groups of UBS as a result of using
different assumptions and criteria. UBS is under no obligation to update or keep current the
information contained herein. Neither UBS AG nor any of its affiliates, directors, employees or
agents accepts any liability for any loss or damage arising out of the use of all or any part of
this material. © UBS 2007. All rights reserved.”
UBS Direct Execution
677 Washington Boulevard
Stamford, CT 06901
Tel: +1-203-719 1750 or +1-800-563 8018
[email protected]
www.ubs.com
93

Order Management Systems / Execution

Transcription

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