The TRADE 81 - Q3 2024 | Page 83

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different brokers at 38.9 % and connectivity with internal systems at 37.3 %. When it comes to the least important feature , respondents again noted FIX capabilities , with only 12.4 % percent of respondents indicating it as one of their top four features , down from 13.7 % in last year ’ s survey as the feature is now considered by most to be table stakes . EMS vendors are therefore more likely to differentiate themselves from other providers in the areas that rank as the most important to members of the buy-side community . The ways in which buyside firms rank the most important features of their EMS speaks to the evolving priorities and capabilities of the solutions providers in the market . Coming on the back of significant improvements in product functionality , it is not surprising to see features related to implementation and upgrades jump in importance . The most significant yearon-year increase in ‘ feature importance ’ in this year ’ s survey was number of direct connections to execution venues , which rose 6.58 %, followed by increases in integration with order management systems (+ 4.07 %), low latency (+ 3.31 %) and breadth of broker provided algorithmic trading options available (+ 2.66 %). EMS features that showed the most significant declines in importance in 2024 include connectivity with internal systems ( -8.21 %) and breadth of asset classes covered ( -6.23 %). In contrast , when asked what additional

capabilities respondents would like to see from providers , there were several calls for broader asset class coverage . We have continued to see the buy-side reengineer the frontto-back transactional flow and consolidate systems . However , given that EMSs are like the tip of the spear into markets , and depending on the asset class , the connections to those market venues need to be very specific . Although we have seen multiple vendors continue to consolidate OMS and EMS capabilities , it is much easier to say than actually execute on the TCA playing field . Figure 4 shows that while the majority ( 65 %) of responding firms in this year ’ s survey do note only using one EMS , the percentages are largely in line with recent years . When respondents were asked to indicate their method for connecting for electronic trading , 48 % stated they use a single multi-broker , multi asset-class EMS , while 22 % use multiple single broker and / or single asset class EMSs . In addition , 19 % noted that they link directly to brokers from their OMS , while 9 % link directly to trading venues via their internal systems . Continuing to stay true to prior year survey results , Figure 5 shows that , in general , as firms get larger and have more complex strategies , they tend to use a greater number of EMS providers compared to smaller firms . Although the differences are not significant , the gap between the number of providers used by the largest firms and the smallest firms responding to the survey continues to narrow . This year ’ s survey reveals that firms with more than US $ 50 billion in AUM used an average of 1.59 providers , whereas those with less than US $ 5 billion in AUM used 1.38 providers . As shown in Figure 6 , respondents predominantly trade equities ( 91 %) through their execution

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