THETRADETECH DA I LY
How does your trading desk deploy order
(OMS) and execution management systems
(EMS) to manage the increasingly complex
trading landscape?
Cathy Gibson: Currently, we use two systems
for order management, and we ran an exten-
sive request for proposal process last year
analysing eight different providers of EMS.
We narrowed that down to two providers and
eventually chose the EMS that we thought
was right for our trading activity. Now
we are in the implementation and testing
phase, which, like any testing phase, takes a
considerable amount of time, but it’s there to
interview
THE OFFICIAL NEWSPAPER OF TRADETECH 2019
There are standalone gold-standard products,
but they very much specialise in each sector.
Finding an EMS that is multi-asset is about
working with the providers to ensure that
they deliver what you need and what your
expectations are. It’s also important to note
that sometimes a multi-asset system can’t
function properly with the infrastructure
that’s already in place, and that is nothing to
do with the provider or the system, it’s about
the asset manager. It may not be the case that
my OMS can’t deliver cross-currency swaps,
but it could be that the information I am feed-
ing into the OMS or EMS simply isn’t good
“For providers, establishing a truly multi-asset EMS
has traditionally been a challenge. EMS originated in
the equities world, and the technology has moved asset
class by asset class.”
ensure that we have the tools that we need
and that the integration with our workflow is
successful.
What are the current limitations in the OMS
and EMS space, and how could providers
address these?
CG: In terms of the challenges in running an
EMS, it takes a substantial amount of work to
get the systems integrated into your process.
We had a debate recently about the advantag-
es of a standalone EMS or an OEMS, but the
benefits of a standalone EMS for me is that, in
theory, we can plug it out if we need to. If we
go for a product that is both OMS and EMS,
it’s a huge infrastructural change, and if you
aren’t happy with the service of the OEMS
provider for any reason at all, it’s difficult to
divorce that from your infrastructure. The
standalone EMS, in my opinion, is slightly
more flexible because it’s plug in and plug
out. Although, that being said, by no means
do I want to go through the process of on-
boarding an EMS to then plug it out; it’s more
about that flexibility and functionality.
Another challenge I’ve faced in this
space has been finding an EMS that is truly
multi-asset. I really didn’t want to have one
EMS for equities, one for fixed income, one
for FX and then one for derivatives. An EMS
is supposed to aggregate information into one
place, and so ending up with three or four
different systems would only serve to further
fragment my infrastructure, not consolidate
it.
For providers, establishing a truly multi-as-
set EMS has traditionally been a challenge.
EMS originated in the equities world, and
the technology has moved asset class by asset
class into the fixed income space and so on.
enough. And that’s not necessarily the failing
of the technology company, it can often be
that an asset manager isn’t set up to enable
that kind of functionality.
For asset managers looking to implement OMS
and EMS, what should they consider before-
hand?
CG: The key factor to consider when it comes
to OMS and EMS is that it’s not one size fits
all. There isn’t one system out there consid-
ered to be the best. It depends on what each
individual asset manager has set up in the
infrastructure and what they are looking to
get out of implementing a new system. By no
means would I decide to implement an EMS
based on the fact that some of my peers have
chosen to work with that provider, because
that shoe might not fit. As an example, we
wanted a transaction cost analysis (TCA)
feature to work alongside the EMS and our
vendor of choice was able to provide that
which was key. Some of the other providers
couldn’t offer the same. It’s important to
spend the time to go through what your needs
that it will function correctly. That can be
a considerable investment. And with the
lack of regulatory forbearance in the market
at the moment, if you change anything on
your trading side you need to go back and do
regression testing to see if it impacts other
things like your transaction or trade report-
ing, for example. In theory, the answer is that
it shouldn’t, but if it has then it’s a serious
problem. This isn’t necessarily the failing of
the technology company or OMS and EMS
provider, it can often be a matter of ensuring
the asset manager has the correct workflow
to embed the new technology.
It’s a costly and significant undertaking,
and I don’t mean in terms of the cost of the
actual product. You are running a team with a
project manager and business analysts to help
implement this, so asset managers need to be
mindful of that when moving forward with a
new system.
What do you predict the main themes will be
at TradeTech this year?
CG: I suspect that MiFID II will continue
to be a talking point at TradeTech this year.
MiFID II wasn’t a ‘one deal and you’re done’
type of initiative, it’s an ongoing process of
improvement and enhancements this is par-
ticularly true for best execution.
Given that TradeTech is equities focused, I
think we will also be talking about the shared
trading obligation. Hopefully we will have a
bit more clarity on that before the event, but
it’s been clear from the guidance from ESMA
that there are 14 UK securities that will have
to be traded in the EU. Even with a ‘no-
deal’ scenario, I hope that a common-sense
approach will be worked out because it’s not
the banks or the asset managers that will lose
with this type of agreement, it will be the end
investor.
Which of the sessions at TradeTech are you
most excited to see this year?
CG: It’s always good to hear from the regula-
tors and get a sense of what they are looking
at and, of course, an opportunity for the
industry to voice or thoughts and challenges.
There look to be some great sessions on artifi-
cial intelligence and of particular interest
“The key factor to consider when it comes to OMS and
EMS is that it’s not one size fits all. There isn’t one
system out there considered to be the best.”
are, where the gaps are in your infrastructure
and what you want out of it.
I think the testing phase is particularly
important because you need to go through
your workflow and the new system to ensure
to me is the fire side chat on the multi-asset
trading desk. I am looking forward to learn-
ing from my peers and meeting the various
market participants.
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