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MiFID II Transparency Puts Stress on Data Architecture

Buy-side firms are facing huge changes in disclosure and transparency requirements, which could upend their data management architectures, according to this guest commentary from FlexTrade.

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May 6, 2013

Debate on EMS/ OMS Merger

By John D'Antona Jr.

One trading system or two?

So far, there's no clear direction as to whether buyside trading desks should keep management and execution of their orders in two separate systems or unify them in a single one.

The lack of consensus is a core finding of a recent Tabb Group report authored by Cheyenne Morgan. The study, "Buy-Side OMS & EMS: A Market Snapshot," found that almost half of the U.S. asset managers and hedge funds polled prefer to have separate order and execution management systems, despite growing overlap in functionality between the two.

"There is no real consensus out there on one system," said Morgan, an analyst for Tabb Group.

Tabb surveyed 52 buysiders.

Morgan told Traders Magazine that respondents who wanted the unified system tend to be smaller firms that don't have a great deal of order flow and therefore don't require lightning-fast EMS.

Bigger firms, however, want to keep the OMS separate, as they need to maintain dedicated and complex audit trail records and have a large compliance need.

The notion of combining the two management systems originated a few years ago as institutional investors' technology budgets shrank due to the ongoing decline in trading volumes and profits.


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