Mostly… fixed income and cross product eTrading

June 4, 2007

Multi-broker FI EMS….

Filed under: etrading, OMS / EMS — holky @ 4:12 pm

So Goldman Sachs has extended the functionality of its REDIPlus multi-broker execution management system (EMS) in Europe, so users in the region can now route orders to other brokers’ algorithms via their platform.  Joining the dots between this and my previous post on EMS for fixed income , when should we expect to see an EMS standing up and being counted as a customer-side desktop for Fixed Income?  

Of course this isn’t just dealers who can do this. While it seems initially a less likely outcome, how about one of the FI ECNs having the courage to acknowledge the competition in particular product sets where they don’t excel, and do the plumbing to let their GUI offer their customers a route into another venues liquidity…

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11 Comments »

  1. As a question… Where would someone route an FI order to? In US FI do you mean BTEC or ESPD? Is anyone offering this yet?

    Comment by jeremiah — June 5, 2007 @ 2:52 am

  2. i was thinking more along the lines of tradeweb, marketaxess, bloomberg and other b2c

    Comment by holky — June 5, 2007 @ 6:26 am

  3. In fairness Holky, that is the same as asking a bank that isn’t strong in, say, Inflation swaps to add a button to their swaps page on Bloomberg that takes them straight through to BARX……why would they do that? Client service?

    Comment by waratah — June 5, 2007 @ 8:33 am

  4. this is not about putting a link from a dealers bloomberg page .. its about a dealer getting their proprietary app onto client desktop; and building in the ability to connect into other liquidity in order to use the argument “install it .. its the only app you need to run”

    so my previous comment was to offer the ability for client to connect INTO bloomberg, tradeweb and so on… via that app.

    Comment by holky — June 5, 2007 @ 9:48 am

  5. I know, I was making a comparison re: “how about one of the FI ECNs having the courage to acknowledge the competition in particular product sets where they don’t excel”

    I assume you mean, for example: MarketAxess allow their clients to access Govt bonds on TradeWeb via their portal? Or am I mistaken?

    Comment by waratah — June 5, 2007 @ 1:28 pm

  6. thats pretty much it. my initial thoughts were about dealers offering a desktop that had their own offering and also a ‘generic’ (lets say FIX) plumbing facility that client could use to connect into their chosen other venues.

    then it extended to one of the existing ecns offering this ‘generic’ fix connectivity to let client hook into anywhere they want to connect it … so feasibly one of the other ecn’s fix pipes; client still does the work and it’s ‘their’ connection (so no question of ma having to do a deal with tw first) .. just the client’s order management / execution management is through whatever the other gui was.

    of course this would also flush out the ecns who are claiming a client-side FIX pipe but dont really have this in working and usable form

    Comment by holky — June 6, 2007 @ 3:10 pm

  7. I agree that clients (of a certain sophistication/size) will, soon enough, have the ability (as the sellside do now via ION etc) to have a consolidated ECN frontend. This is pretty powerful stuff and quite scary for Banks as it means they have, in many respects, better pricing info that them.

    However I see 3rd parties (perhaps the same that do this for the Banks or OMS vendors such as LZ) doing this rather than the ECN’s themselves. Now whether the Banks will support this????

    Comment by waratah — June 6, 2007 @ 3:43 pm

  8. but the ECNs dont picture themselves as that front-end? will they stand by and say its not their opportunity to get something onto the customers-who-are-not-of-a-certain-size desktop? .. even if in doing so they let the customer utilise ‘other’ venues; which clearly destroys their per-terminal revenue stream once they dont own the termninal? is the future just down to revenues from market data feeds?

    Comment by holky — June 6, 2007 @ 4:03 pm

  9. Well, as it stands, the likes of MA, TW & Bloomberg are quite closed systems….could they change (would see BBG doing something first)? Sure, possibly….

    re: terminal fees….this, as you know, is my point when I say I’m concerned that Bloomberg and Thomson-reuters may end up the only two players in the FI e-Trading space.

    Comment by waratah — June 7, 2007 @ 12:00 pm

  10. It is innovative (Global Hd of IR e-trading tells me)-what else do banks have to attract electronic flow to their product? If someone is faster than me are my clients going to up sticks?

    No-so long as I offer a flexible all encompassing system that they can easily plug into. While pricing and research are key it is the innovation and add ons that get bums on seats.

    I think this follows the trend at Goldman, who are now expanding in to areas that they are not currently strong in. If they dont have an algo to offer themselves, or even if they do, so long as the client is on their books…opportunity will come

    Comment by sodappa — June 7, 2007 @ 4:57 pm

  11. Are banks really having a problem attracting e-flow? Which product? IRS? or TSY? Is the market happy with RFQ? Multi-dealer platforms for a fee or would they rather look to the equity and fx markets, build proper ems systems and just link to the 3-5 dealers they use most directly?

    Could Bloomberg platforms (not ECN-tradebook) really be the best as it is the cheapest and great value? (assuming customers accept the RFQ)

    Comment by jeremiah — June 8, 2007 @ 2:21 am


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