Convergence Under Way
The Bank of New York recently assembled myriad acquisitions, including its former Sonic Trading DMA business, DEx, into a separately managed business called BNY ConvergEx Group, which also will include BNY's B-Trade and G-Trade electronic brokerage businesses by 2008. Eze Castle Software (Boston), an OMS provider, has put in an equal investment in the new company, with the express purpose of more tightly integrating the vendor's OMS with BNY's agency brokerage services.
BNY is working on offering an integrated Eze Castle-Sonic hybrid. It first will be offered side by side as a desktop installation but eventually will be a converged offering on an application service provider (ASP) model, whereby the bank will host the machines that execute and log trades, requiring only standard PCs on the client side, says Joe Cammarata, managing director of strategy for BNY Brokerage.
"You get a lot of protections from an integrated solution," Cammarata says. "It avoids a lot of the fat-finger errors that come from swiveling between screens, like typing in another zero. With this offering, you cannot execute more than your blotter displays, for example."
The pitch appears to resonate with traders. "I think that soup to nuts is the way to go," says Martin Amann, a former trader at Five Mile Capital in Stamford, Conn. "It gets rid of the need to put in a trade manually and allows you to leave the desk occasionally and know that your order got into the system."
For its part, Burlington, Mass.-based Charles River Development (CRD) is hard at work on creating a DMA front end for its OMS platform, the Charles River Investment Management System (IMS), to be released later this year. While DMA and EMS are terms that many already use interchangeably, CRD's director of product management, Steve Engdahl, feels the OMS-EMS distinction will no longer be necessary.
"As I listen to the EMSs describe themselves as having market data, algorithms, and program and list trading, all these are things that we have on the OMS side," Engdahl says. "There are no major differences or a phase shift between the two in my view."