October 25, 2012

Despite the slump in equity trading volumes, OMS and EMS vendors say they are seeing demand for new systems driven by regulatory changes and electronic trading in non-listed instruments. Advanced Trading spoke to senior executives at these firms to learn about their newest initiatives.

Portware purchased the technology assets of Aritas —the former Pipeline Trading Systems—giving it an algorithmic switching engine and analytics for selecting a strategy and scheduling trades.

“The big move we made was to reintroduce Alpha Vision as our broker-neutral algorithmic optimization solution,” says head of product strategy Harrell Smith. Al­pha­ Vi­sion lets clients select an order to be routed to a broker, and then switch among the broker’s algos, Smith says.

Portware is also focusing on its cloud version of Portware EMS. As opposed to one-size-fits-all cloud deployments, clients can customize the system and integrate it with their OMS and other analytics.

[The Buy Side Wrestles with the OMS-EMS Dilemma]

FlexTrade Systems moved into electronic fixed income trading through a direct connection into BGC Partners’ proprietary eSpeed trading platform. The Flex­Trade multi-asset EMS is certified to trade U.S. Treasuries. FlexTrade has wanted to add fixed income capability on its Flex­Trader EMS for a long time, but it depends on counterparties who are willing to offer APIs to their liquidity pools, says president and CEO Vijay Kedia.

“The buy side has always been keen on trading fixed income in a more transparent manner,” says Kedia, whose company also acquired Derivix, an options platform in June, which is used for pricing, real-time analytics, portfolio risk management and multi-broker electronic execution.

Charles River Development has rewritten its OMS to embed EMS functionality.

“We are the only one that has EMS functionality embedded in the OMS,” says managing director Tom Driscoll. “There are others that have tacked on EMS functionality.” Driscoll finds that some buy side firms are replacing older platforms that haven’t invested in the technology. Many of them are moving toward hosted solutions, and some of the more complex, expensive EMSs are also being replaced. Another trend is that 80 percent of the Charles River’s new business is using managed services. One reason is that with multiple EMSs installed on a desk, “when firms started looking at workflows, auditing and compliance, there’s a lot of disjointed aspects,” to the process, Driscoll says.

Fidessa has seen a significant uptake in the desire to trade fixed income electronically, says Robin Strong, director of buy side market strategy. It recently launched its Buy Side Connectivity Service with connectivity to all liquidity venues and hosts applications.

“We move all of the connectivity infrastructure into our data center,” Strong says. Fidessa’s EMS platform now has multi-asset functionality and is a complete hosted platform in the Fidessa cloud.

Trading Screen continues to expand multi-asset trading through its combined EMS/OMS.

“The clients want an EMS and OMS delivered on a software-as-a-service model,” says CEO Philippe Buhannic. Since hedge fund assets under management have declined 23 percent in recent years, these firms have “less money to run machines.” Trading Screen has also developed what it claims is the first OMS for hedge funds on a SaaS model that has a net asset value calculation and handles allocations. Over the next three years, Buhannic predicts that interest rate and credit default swaps, ETFs and FX options, will be traded electronically. “It means that every system has to adapt to these products.”

ABOUT THE AUTHOR
Ivy is Editor-at-Large for Advanced Trading and Wall Street & Technology. Ivy is responsible for writing in-depth feature articles, daily blogs and news articles with a focus on automated trading in ...