Innovation in EMS
Eze Software – Eze’s execution management system is often recognised as one of the most popular by the buy-side. It provides multi-broker trading platform providing access to liquidity venues for execution and various other functions. It also integrates OMS’s and portfolio accounting modules to allow for more efficient workflows. Throughout 2017, Eze has added various new tools to its investment product suite in preparation for MiFID II, including transaction reporting, trade reporting and best execution support.
FlexTrade – Earlier this year, FlexTrade turned heads in the market after launching an augmented reality trading application within its EMS, known as FlexAR. The technology provides an interactive order blotter, trade ticket and charting in the virtual space, meaning traders can see and interact with markets in a completely unique manner. FlexTRADER EMS provides connectivity to more than 200 venues, including primary exchanges, dark pools, broker-dealers and liquidity providers.
Trading Screen – TradeSmart EMS is a multi-broker, multi-asset class trading platform providing a customisable graphical user interface that allows participants to integrate various dealers and listed and OTC instruments for electronic order routing. This year, TradingScreen expanded its EMS offering with the launch of a FX specific platform, providing traders globally with a fully neutral system that can openly source liquidity and meet best execution requirements from a single screen or application program interface.
Innovation in clearing
DTCC – DTCC in the US had undergone a restructuring process to bring its derivatives back-office and collateral management businesses under one roof, in a bid to “create a more robust end-to-end processing solution for the industry.” DTCC bolstered its position as a key infrastructure for the US fixed income market with the introduction of voluntary repo clearing, where it facilitated the cleared trade between Morgan Stanley and Citadel.
Eurex Clearing – With euro-denominated clearing of derivatives becoming a key political battleground in the Brexit negotiations, Eurex Clearing stands out as a clear beneficiary from a potential relocation of clearing from London to Europe. The onboarding of KfW, a German-based bank, for euro-denominated interest rate swaps clearing was a clear sign of a potential migration from the UK to Eurex. Meanwhile, Eurex Clearing has progressed in bringing the buy-side into the clearing process by signing Dutch pension fund giant PGGM as a direct participant of its securities lending CCP.
Euronext – Euronext has made a clear effort to win a larger share of the EU clearing pie in 2017. It stepped up its efforts by acquiring a minority stake in LCH SA, expanding its clearing capabilities. The deal also gave Euronext a pre-emption right if LCH Group decides to sell more than 50% of LCH SA, giving it right of first offer.
LCH – LCH has consistently brought innovation to the clearing industry, and this year was no exception. Not only did it introduce a repo clearing model for asset managers, it introduced a new clearing membership for buy-side firms to post collateral directly with the CCP. Off the back of this, and with stricter regulations on uncleared derivatives, it posted a number of records in clearing FX and inflation swaps.
Innovation in derivatives technology
Lombard Risk – Technological solutions for collateral management, driven by regulation, has seen Lombard Risk expand its business globally. Its highlights for 2017 included a strategic alliance with DTCC-Euroclear’s joint venture, GlobalCollateral, in which it would link up its flagship COLLINE solution with the Margin Transit Utility (MTU). It also launched a derivatives documentation and colaltearl management tool with Smart Communications to manage margin calls.
Numerix- Numerrix has evolved from its origins as a pricing library company to a provider of trading and risk managing systems. Fintech innovation has been central to its product strategy over the past year. This is evidenced in the new technologies and flexible tools it has leveraged that enable its clients to utilise different elements of its technology stack in unique ways specific to their business needs. Embracing open source and market standard technologies within a consistent architecture has allowed its users to rapidly incorporate new features, address complex requirements and quickly customise end-user workflows.
Tradeweb – As more OTC derivatives continue to migrate onto regulated trading platforms, Tradeweb has sought to provide the industry with electronic solutions to facilitate this move. With an increasing number of buy- and sell-side firms turning to technology to improve the efficiency of their trading operations, Tradeweb has provided automated trading tools to increase both speed-to-market and reduce operational costs. Since launching in the second half of 2016, Tradeweb has seen a growth in the number of buy-side firms actively using automated trading, which now make up a growing percentage of Sef volumes.
TriOptima – The integration of all of NEX Group’s post-trade businesses saw TriOptima become part of the NEX Optimisation umbrella. Its focus for the year was to help buy-side firms cope with the onset of the variation margin rules for non-cleared derivatives through its flagship triResolve margin service. In February it onboarded 560 new clients in anticipation for the rules and has since ventured into new currencies and products, including FX forwards and swaps and compressed the first Mexican peso interest rate swap. In June it reported it had eliminated over $1 quadrillion in OTC derivative notional principal since its introduction in 2003.