Adoption rates of innovative order management systems (OMSs) in Asia are being accelerated in large part by the complexity of regulatory regimes in the region and the need of asset managers for operational efficiency, according to senior executives of technology company and agency broker ConvergEx Group, which opened a Singapore office on 2 November 2010 for its Eze OMS.
The Singapore office is Eze's third in Asia, after its Hong Kong office was opened in 2008 and an Australian presence was established in late 2009. The company's clientele in the region comprises over three-dozen hedge funds and traditional asset managers in Japan, Hong Kong, Singapore and Australia.
R G Manalac, director of Asia-Pacific consulting at ConvergEx's Eze Castle Software, says, “We decided that our growing client base in Singapore warranted people being on the ground.”
He notes that there is no difference in the functions carried out by the regional offices in Asia, as the individual consulting teams are expected to handle the whole spectrum of client support functions, from managing implementations through to ongoing account management.
“Each consulting team controls the whole relationship, so whether its basic troubleshooting issues, day-to-day support or managing projects, all that is managed by the same team so we don't lose the continuity of the relationship over time. The core development of the product will remain centralised at our headquarters in Boston and each team in Asia will work with them to meet any specific client needs as they arise,” explains Manalac. “We don't have the idea of an implementation team, consulting team, and help-desk somewhere else. For us, it's the same team that deals with our clients from start to finish. Once we start getting demand for the system in different regions, we want to be as close to the clients as possible and that means opening an office there and staffing it with experienced consultants.”
Andrew Sit, director of Asia-Pacific sales at ConvergEx's Eze Castle Software, adds, “We have a very high-touch support model. We work with clients very closely and one way to do that is to be physically close to them so we can respond very quickly to whatever the client's needs are.”
Eze OMS leverages a real-time open architecture to streamline the investment cycle for all asset classes – from idea generation through settlement. It provides functionality to support portfolio management, compliance, trading and operations in a single platform.
Sit notes, “It's not good enough anymore to just trade off an execution management system and an Excel spreadsheet. Investors are looking for evidence that robust infrastructure and the right operational processes are in place to support front and middle-office operations.”
Ensuring efficiency throughout the investment process also means compliance with the diverse universe of rules and regulations in the region, a need that is driving OMS adoption in Asia. Sit adds, “In some markets you can naked short, and in others you cannot, our system can catch and warn you that a borrow needs to be secured before the trade actually happens. Also, in situations where firms don't want to be overexposed to a sector or currency, or need to be in compliance with UCITS rules which restrict investments in certain asset classes, a system like ours would enable traders and portfolio managers to not have to worry about the nitty gritty as they literally have somebody looking over their shoulders to ensure compliance with fund, firm and regulatory rules.”
Manalac acknowledges that the Eze OMS has had to adapt to Asian conditions, but says this process was achieved quickly through on-the-ground expertise. “When we arrived in Asia and started working with locally based funds, we did find that there were some nuances like ID markets or currency needs, and we did need to change the system a little bit. The presence of our consulting teams in the region allowed us to react very quickly to that and we’ve enhanced the system to work better for Asian managers,” he says. “For example, in Asia, currency exposure is a major concern given the multitude of markets that are traded in the region, especially given the financial crisis. The big worry for clients was how to manage their currency exposures in real time. We built in more of a real-time look on your actual cash balances, forwards and all your currency hedges in conjunction with your positions to allow you to react very quickly to the market.”