Trading technology firm Charles River Development is planning to integrate its Investment Management System (IMS) with several more brokers’ algorithmic offerings over the next two months, following last week’s connection to Canadian broker CIBC World Markets’ inter-listed Canadian algorithms.
“There are only so many brokers that offer algorithmic trading at this point, but that number is growing, and there are a handful we haven’t connected to yet,” Tom Driscoll, vice president, sales and marketing, Charles River Development, told theTRADEnews.com. “There are probably half a dozen that we are working with right now whose algorithms will be available in the next couple of months.” Driscoll declined to name the brokers, but described them as relatively major players in their countries.
CIBC World Markets is the first Canadian broker to which the Charles River IMS has connected. The inter-listed algorithms – which trade stocks listed in both Canada and the US - include VWAP, POV, Implementation Shortfall/Arrival Price, Hide and Hit (hidden limit order) and TWAP. The vendor is planning to extend the geographic scope of the algorithms offered on its system beyond the UK and US with future integrations. “At this point, we have covered most of the US and UK markets quite thoroughly, and we’re really reaching out into some of the other larger countries where there are major players,” Driscoll said. The connection to CIBC, as with its other integrations, was driven by client demand, said Driscoll. “We have a substantial Canadian client base of 20 or more clients on the buy-side,” he added.
The increased client demand for algorithm integration reflects an evolution of traditional order management systems into hybrid order and execution management systems. “Clients are demanding execution-management-system-like tools in their OMS,” Driscoll said. “Any vendor on the OMS side that doesn’t supply that is probably going to under-serve their clients.” Other capabilities that clients are increasingly expecting from their OMS vendors include real-time transaction cost analysis, smart order routing, program trading, watch lists, user-defined algorithmic trading and DMA integration, he added.