AXES, a global agency brokerage, has launched a global execution management system to facilitate electronic trading to the over 100 countries it services. The system, called GEMS offers cross-border trading in developed, emerging and frontier markets, notes Peter Gaffney, AXES president. AXES has worked with its parent, Auerbach Grayson & Company, to develop a network of brokers in countries from Brazil to Botswana. The company partners with one broker in each country -the broker that AXES believes offers the best services and research. And through that firm, AXES offers execution, research and clearing.
Now via GEMS, clients can reach the countries in this network electronically. GEMS is a multi-currency, multi-asset system that provides global trading, straight-through processing and integration with custodians and clearing agents, according to Gaffney. Buy-side customers can link to GEMS through a FIX interface or via an AXES graphical user interface. The orders are then routed electronically to the broker in the particular country for direct execution on the local exchange. The system also has a post-execution tracking feature that will automatically transmit trade details to the back office to ensure timely settlement. GEMS focuses on equities and equities-related derivatives to start, but by the third quarter it will include foreign exchange as well.
GEMS has been operational with select firms since November, but AXES did not want to roll the system out to the entire market until the settlement tacking feature was complete. AXES worked with many vendors to develop GEMS, but Gaffney would not disclose them.
The system was designed for both the buy and sell side. "Hedge funds are a big part of our business. They are hungry for new opportunities and want to trade in some of these emerging and frontier markets," he says.
However AXES also does business with broker-dealers. "We have partnerships with broker-dealers that want to trade internationally. They want something that they can use as a one-stop shop to various destinations. And we offer them the back-end services, post execution via FIX and OMS connectivity," he explains.
"We are offering a bundled service-execution and research services," Gaffney notes. "We wanted to develop a service that gets the order to the other side and offers color in the marketplace," he adds. Some of the areas where Gaffney sees the most activity include parts of South America and Eastern Europe. In addition, the Middle East, North Africa, India and Indonesia are all developing rapidly.
Gaffney believes that once AXES' U.S. client base becomes comfortable trading overseas, they will become interested in some of the emerging and frontier markets. "We'll provide them with information on how these markets are evolving. We've known about these opportunities for years and want others to be aware of them," he says.
AXES' competitors include the likes of Trading Screen and GLTrade, but Gaffney contends, that AXES is a brokerage first and foremost, and claims that as a brokerage the number of countries AXES connects to sets the company apart.
As for offering a dark pool of liquidity in any of these markets, Gaffney laughs, "Many of these markets are already dark," but joking aside, he says, the company does plan to have some "crossing situations" in developed areas and will have a plan in place to facilitate this by the end of the second quarter.
Regarding investment opportunities through the electronic network it has created for GEMS , "Information is the greatest tool we have today. The industry needs it to evolve. Botswana may not be on your mind today, but it will by the third quarter," Gaffney predicts.AXES, a global agency brokerage, has launched a global execution management system to facilitate electronic trading to the over 100 countries it services. The system, called GEMS offers cross-border trading in developed, emerging and frontier markets, notes Peter Gaffney, AXES president.