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August 6, 2009

OMS Vendor Makes Shorting Easier

By James Ramage

BNY ConvergEx Group introduced a feature to its upgraded order management system, Eze OMS, that promises to streamline the stock locate process for hedge fund users when they sell short. The short locate functionality sends electronic requests for locate to users' prime brokers straight from the OMS, said John Dolan, a director in advanced program management at ConvergEx's Eze Castle Software.

In the stock lending business, the process of locating securities to short is still mostly done manually, Dolan said. With the new feature, instead of making multiple phone calls to their prime brokers, going to multiple Web sites or sending multiple IM messages, users can aggregate the locate process in one place and execute it with one function.

"With the click of a single button, they can literally send [requests] out to all their primes and get all the information back onto one screen and see the data right on their desktop," Dolan said.

Since last year, when regulators passed a short-selling ban, the stock loan business has been under pressure to become more transparent and automated. To address this, Dolan said, the Eze OMS feature has built-in compliance that warns users, or restricts them, from executing a short trade until they have the necessary shares located within the system.

 

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