Mostly… fixed income and cross product eTrading

October 30, 2007

Project “Utility”

Filed under: 2015, etrading, OMS / EMS — holky @ 10:20 pm

Another question from roving reporter John…putting me to shame in terms of the number of serious posts recently.

So, we live in a world where Investment Banks compete fiercely in most areas (a good thing) but also collaborate (ie Boat, Turquoise) when appropriate. And that’s sensible, horses for courses. At the moment the sell-sides either buy or build their connectivity infrastructure and most have a mix of Fidessa, ORC, GL Trade, Cameron, TransactTools, Javelin (NYFIX) Appia and so on. On the buy side in the last five or six years there have only really been two choices – Charles River or LatentZero. And that lack of competition is a bad thing.

So, a modest proposal. Why don’t the heads of connectivity from Morgan Stanley, Merrill Lynch, Credit Suisse, Goldman Sachs, Lehman Brothers, Bear Stearns and so on stop buying EMS vendors and actually set up a broker neutral OMS/EMS. Neutral by design and by ownership. Genuinely FIX compliant and given to any buy-side that wants it – client of the owning banks or not. Charge it out on a rental model – a modest rental per dealer per month – maybe say $1,000??

Maybe even look to Open Source it for the hedgies and the funkier chaps with more tech smarts…

Or is that what the $180million investment in Thomson Tradeweb was all about?

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4 Comments »

  1. I’m not sure you can roll Cameron, TransactTools, Javelin (NYFIX) Appia in with the sell side but not the buyside. Most of the buyside OMS vendors will act as resellers for a particular FIX solution but can accomodate another if its a deal breaker.

    Sell Side Heads of Connectivity don’t necessarily strike me as the best people to get together to design a buyside OMS, the very fact that, as you say they utilise vendors ‘Fidessa, ORC, GL Trade, Cameron, TransactTools, Javelin (NYFIX) Appia’ maybe points to them not necessarily having a ‘roll your own’ mentality.

    Currently, and I emphasise ‘currently’ there doesn’t seem to be the desire on the buyside to build connectivity teams and/or infrastructure and as such they choose to rely on vendor systems. This will almost certainly change though.

    The Thomson TradeWeb quote is interesting. I see the reverse happening in that FI platforms as an entity will be a destination that people FIX RFQ into and then carry out the execution within their native OMS, and that FI platforms as a piece of trading desktop real estate, won’t exist.

    But thats just my opinion

    Comment by oxymoron — November 1, 2007 @ 1:20 pm

  2. Bloomberg already do.

    EMS/POMS/AIM

    J/.

    Comment by James Hogbin — November 7, 2007 @ 12:44 pm

  3. yeah, but which big European buy sides want to use Bloomberg? Upload all your positions to bloomberg every day?

    Comment by John Greenan — November 12, 2007 @ 9:04 am

  4. […] – Peter Gaffney (Axes) believes the answer is Global Execution Management System. I wonder if Mostly has seen Gems? Advanced Trading has an old article on the OMS/EMS convergence which maybe worth a […]

    Pingback by Execution Management System (EMS) « Tales from a Trading Desk — February 12, 2008 @ 12:39 am


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