EMS (Execution Management System) is a specialized application suite built for buy side fund managers and traders to access real-time market data and provide fast, seamless to trading destinations including brokers, stock exchanges and proprietary gateways. In this blog, we primarily highlight the important features that you should consider before deploying your first EMS, or even deciding how to upgrade to a better one.
Important Features of Buy-Side EMS:
Understanding the unique demands addressed by buy-side EMS , it should be no surprise that buy-side traders require sophisticated and powerful tools that can help them navigate these challenges head-on while remaining compliant with a variety of complex operational and regulatory requirements.
When we step back and analyze what is required of such a platform, a clear picture of EMS application emerges with certain features that you should consider while choosing your next EMS:
- Deep and Wide Integration Capabilities
- Your EMS should offer full integration to multiple OMS with real-time communication channels for order routing, data streaming, trade processing and other features for analytics, compliance management, reports reconciliation, back-office communication, etc.
- The system needs to be fueled by multiple market data streams from various different sources via native / vendor connectivity. You’ll be working with multiple sell – side brokers, so it’s worth looking for broker neutral platforms.
- The platform should be compatible to trade multiple assets, of alternative pools of liquidity including crossing networks, ECNs, Dark Pools, broker IOIs, direct bank connections, and add more on the go as you scale operation.
- It should be compatible enough to manage multi instrument baskets, order splitting and routing.
- Intuitive UX, Configurable UI, Integrated smart trading workflows and Dedicated EMS deployments (on-premise / data-center / cloud hosting) are some other important attributes to look for.
- Support for Basket Trading, Algos and Order Splitting:
- The system should be able to execute your orders against a variety of different criteria including broker preference, order size, available liquidity, market conditions, regulatory requirements, etc. and determine which among them are suitable for smarter order routing.
- Precise executions (with minimal slippages) & advanced transaction cost analytics (TCA) are some other important features to look for while choosing your EMS.
- Automation can be either off-the-rack (such as via algos and APIs : TWAP, POV, Sniper, etc) or a more bespoke process informed by Post Trade TCA data for the specific instrument.
- If possible, automation should be applicable across asset classes with the flexibility of taking in market-specific inputs and adapting execution destinations depending on the situation, it should be flexible enough to integrate with other applications in your trading infrastructure: APIs, OMS, Broker Gateways, Research Systems, etc
- Capability and Flexibility for Customization:
An easily overlooked but very important consideration before you choose to deploy the new EMS – ability to customize.
The best-of-breed EMS should not be thought of as an “off-the-rack” suit, which is often ill-fitting. Your trading style is different from your peers and competitors in the market – and you want a technology system that adapts to it. If you’d like to implement your custom trading workflows, its best to look for a vendor that is willing to tailor their standard EMS for you – and also add morebroker integrations / market access swiftly on demand
4. Value Add Tools and Services:
- Look for an EMS provider that also provides value-add tools like trading algorithms, risk management capabilities, trading APIs, and most important dedicated, round-the-clock expert tech support for your global market operations.
- Few popular vendors including uTrade offer both buy side EMS and sell side OMS, which can be deployed at your partner broker sites for maximum operational and cost efficiency.
- uTrade EMS integrates easily with your OMS, proprietary gateways and databases – allowing you to seamlessly import orders, route them to desired execution destinations, and also export fills back to proprietary or third party OMS applications for continued operations.
To sum things up, with trading desks continuing the trend of consolidation, they are striving to find a trading solution that’s both fit-for-purpose for today’s challenges, but flexible and nimble enough to meet future needs as the markets we trade and how we trade them continue to evolve as a response to increasing innovative technology requirements, evolving regulations, and ability to tap into market opportunities.