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latency , rising by 6.7 % from 2019 to 2020 . Although it experienced a small decline of 2 % from 2019 , the ease-of-use category continues to preside over all other categories as the most important feature , as it has over the past three years . The rise in importance attributed to low latency and the continued dominance of ease-of-use as an important feature of EMS , underline the critical importance of efficient usability to a successful EMS offering .
The consolidation of EMS providers among the buy-side is one trend that shows little sign of abating , as shown in figure 3 . Over 67 % of buy-side respondents reported to using a single EMS provider in this year ’ s survey . This is beginning to build up to a pattern where a growing proportion of buy-side respondents use a single EMS provider . In 2017 this was proportion was just 34 % and it has since grown year-on-year to reach 67.3 % in 2020 , almost double the 2017 figure . Admittedly part of this dramatic increase from 2017 can
“ One industry insider described EMS as a ‘ cockpit ’ for traders during the COVID-19 crisis , providing technology to access analytics and liquidity .”
be explained by the introduction of MiFID II in January 2018 , prompting asset managers to try out a variety of options before settling with a single EMS provider . This tendency to use fewer EMS providers is also partly explained by the increasingly broad offering of vendors who have expanded their asset class coverage to non-equity classes such as foreign exchange ( FX ) and fixed income securities .
The rise in the proportion of respondents opting for a single EMS provider was offset by declines in the proportion of respondents using more than one EMS provider . Most significantly there was a 2.5 % decline in the proportion using two providers , and much smaller declines in the proportion of respondents using three or more providers . Again , this underlines the growing range of capabilities offered by EMS vendors to the extent that a growing proportion of the buy-side are comfortable using just one provider to fulfil all of their EMS demands .
Figure 4 shows the average number of EMS providers for participants , broken down by the client firm ’ s assets under management ( AuM ) bracket . The results remain on a par with last year , with slight decreases observed in the average number of providers across all AuM categories , with the exception of respondents in the $ 1 billion – $ 10 billion bracket . In this category the average number of providers was 1.45 , up by 0.04 from
Figure 3 : Numbers of providers used (% of respondents )
10.7 7.8
7.3
30.0 |
2018 55.9 25.9 2019 62.9 |
23.4 |
2020 |
67.3 |
Number of providers 1 2 3 4 5
70 // TheTRADE // Fall 2020