How does the EMS help the buy-side trader to manage the proliferation of data?
Chris Hollands: As electronic trading has proliferated across the asset classes, the data requirement to inform each step of the order life cycle has increased. The role of the EMS in aggregating and consolidating data is essential across multiple categories, starting with referential data, which often can be a massive challenge especially as it relates to integrating to downstream systems supporting different symbologies, such as PMSs or OMSs and execution counterparties and venues.
A key advantage that our SaaS (Software as-a-Service) infrastructure provides us with is an embedded multi-asset class product master, which means potential symbology issues, and the sourcing of the product data itself, disappear. The next category is real-time market data ranging from centrally provisioned, specialist vendor feeds, to local pricing APIs leveraging existing data sources down to IOIs, RFQs and streaming prices from liquidity providers and venues in the OTC world. Managing this complexity, and all of the associated connectivity in an efficient and cost-effective manner is a constantly evolving challenge but one where the right EMS can clearly provide the solution.
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Best execution requirements under MiFID II have extended the focus from equities into the other asset classes, such as listed derivatives, fixed income and even FX, outside of spot. So inherently data has become a broader theme. There’s also the downstream implications, i.e. communicating all of this order and execution data into the OMS, where under MiFID II, the buy-side’s record-keeping and reporting obligations have multiplied.
What other significant changes have there been to the way data workflows are managed under MiFID II?
CH: The use of broker and specialist vendor pre-, in- and post-trade analytics and their close interaction with the buy-side trader’s book of orders is driving the active pursuit of best execution. MiFID II requires the buyside to maintain a seven-year audit trail of all relevant information regarding the placement, the handling and the execution of orders.
This encompasses the feedback loop between the centralised dealing desk and the portfolio managers explaining exactly how and why the order is being worked. All of this data needs to be captured. The EMS is uniquely positioned to fulfil this function and to feed this information to other systems such as the OMS.
In that in-trade and post-trade sphere, how important a part does data visualisation play now?
CH: With the proliferation of data, the ability to visualise it and to derive meaning from it in a timely manner becomes more critical. For in-trade analytics, configurable exception-based alerting mechanisms are becoming the norm. For post-trade, we have embedded Tableau, a market leading reporting and data visualisation package, which syncs up with both our transaction database and our tick-by-tick database. Clients can then use these out-of-the-box tools to create their own customised TCA reports to fit their precise needs, rather than us providing standard, box-ticking type reports.
Given these developments, how is TS approaching the development of its offering?
CH: That brings us to the whole open and broker neutral nature of our platform, our propensity to integrate to third parties and not try ourselves, to be all things to all people. We don’t profess to be specialists in some of the quantitative analytics, which are of interest to the buy-side, hence we partner. We are partnering on the OMS side with a well-documented alliance with SimCorp and are a preferred EMS partner for Avaloq, the core private banking system.
In the world of analytics, we have fully integrated with OTAS Technologies. Hot off the press, we are pleased to be the first EMS to integrate to BondCliQ, a central market system for US corporate bond trading’s post-trade data. These integrations equip our buy side clients with the ability to extract and use data precisely as they want to without restricting them.
The launch of our enterprise application programming interface (API) website gives buy sides a new way to extract data. We have recently launched a REST API, which is a very quick and flexible way of bringing order data into our platform and extracting execution data. There are a myriad of ways we can help, but most prominently by being genuinely broker neutral and by being open, we offer the broadest range of options and the maximum flexibility.