The buy-side OMS, an appreciation part one...
The buy-side OMS, an appreciation part two...
OMS and EMS: Next moves?
OMS: Managing Drift
OMS: Broken business models
EMS: Staging is not an EMS
[We strongly recommend reading at least the first two of these blog posts before proceeding]
Order Management System as a workflow engine
- Created by PM
- Sent to dealing desk
- Accepted by dealer
- Sent to broker(s) for RFQ
- Sent to back-office for further processing
OMS as a portfolio management tool
In the above example trades the Portfolio Manager will require a considerable amount of data
- instruments held in the portfolio
- calculated values of positions (value in instrument currency and portfolio base currency)
- derived values (percentage of portfolio held in an instrument)
- instruments not held in the portfolio
- benchmark weights
- mandate restrictions
- compliance restrictions
OMS as a state machine
initial state valid next state
This is a vastly simplified version of an OMS that we designed and built in 2002.
OMS as a compliance engine
OMS as a market data sink
Real time and near-time market data is often shown within an OMS. The classic example is for equity markets where a price feed is often integrated into the OMS. Sadly in many cases this is a client-side integration whereby there is a link from a fat-client desktop application to a middleware layer such as DDE (yes, really).
OMS as limit minder
In the cases of OTC instruments the OMS can be used as a limit minder. In the case of an exchange traded instrument a limit order can generally be sent to an exchange. For OTC instruments such as spot FX the OMS can be used to manage limit orders and allow a degree of automation of sending an order to market when the market is within range of the limit price.
OMS as an interconnected entity
Exchange creates a new order type - new FIX Orchestra file - sell-side can trade immediately.
Sell-side connects to a new exchange - new FIX Orchestra file - buy-side can trade immediately.
Sell-side creates a new trading algorithm - new FIX Orchestra file - buy-side can trade immediately.
Sell-side implements FIX allocations - new FIX Orchestra file - buy-side can trade immediately.
The shift in Electronic Trading will be huge - as the trading world will move to a model of computer-to-computer trading whereby the human is moved off the critical path and into a supervisory role.
Update 27th October 2018
End of the line for buy-side OMS
Summary of whitepaper on the evolution of the multi-asset-class trading desk
Whitepaper on the evolution of the multi-asset-class trading desk
Driving OMS reform