CutterResearch, the research arm of consultancy Cutter Associates, is to perform an evaluation of execution management systems (EMSs) for a meeting of the Cutter Associates Technology Council in May 2007. “Buy-side traders’ need for advanced trading tools is prompting organisations to reevaluate their trading technologies at a very basic level,” says the firm. “Firms want to know which EMS players are worth evaluating, what features differentiate them, and how their OMS providers are addressing these needs as evidenced by discussions within the CutterResearch consortiums and on CutterConsulting engagements,” it continues.
Topics to be discussed at the meeting include EMS vendors’ offerings, industry changes affecting the buy-side trader, OMS vendors’ responses to the challenge, and current best practices in supporting an EMS/OMS platform in the changing market.
“Effectively trading equities and other liquid securities like foreign currency in today’s marketplace more closely resembles the task of solving a mystery, as market data and connectivity are commodities for today’s trading desks,” notes the firm. “And yet, while market connectivity and the free flow of information has become a given in the equity trading world today, the tools employed to analyse and leverage this data have not been integrated into traders’ order management systems (OMSs), giving rise to the need for EMSs,” it adds.
EMSs were once strictly employed by sell-side proprietary trading desks and quantitative hedge funds. Both looked to leverage EMS’s strong program trading functionality and direct market access links to trade with more immediacy than other market participants. „But today’s buy-side investment manager is beginning to evaluate these systems in an effort to support the increase in equity trading volume, to provide required access to fractured capital markets, and to facilitate the more robust analytical trading platform that OMSs have historically failed to provide,” says CutterResearch.