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NetDania

The best alternative to expensive legacy systems for trading, news and analysis

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TTMzero

Fully digitized RegTech and capital markets software solutions

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FairXchange

State-of-the-art analytical tools for trading firms

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Athena Systems

Workflow automations for buy-side participants

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OneChart

The ultimate charting framework for desktop and mobile applications

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Social Charts

Interactive client engagement tool that engages clients in conversation internally and online

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NetStation

User-friendly information and analysis terminal, deployable in multiple roles, including trading

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Data Feeds & APIs

Multiple APIs designed to ensure low latency and minimum resource usage

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Fair Value Pricing

Independent fair value pricing for added transparency where current prices are not readily available

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Evaluated Real-Time Market Data

Independent real-time market data feeds at a fraction of the cost

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Key Figures and Risk Indicators

Precise indications of the risk and return probabilities for financial products

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Financial Instruments Automation Platform

Reliable and cost-effective digitization process for securities and OTC trades

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Liquidity Management

Unparalleled insight into your trading with data visualization

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Spark OMS

Highly flexible Investment Management System

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Spark Risk

Manage your risk needs on a central platform

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Take a look at the “Definitive guide to Evaluated Real-Time Prices” to discover how you can save costs today.

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Order Management Systems Explained

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Every trade in the securities market must be properly handled, registered, and tracked. To facilitate this, dealers and brokers will typically rely on a trade order management system, or OMS.

Such order management systems help all parties maintain a clear, accurate picture of each transaction. Below, you’ll find out more about OMS, as well as its primary uses and benefits.

As such, banks and other financial institutions must eventually face the tough decision of whether and how to move away from a legacy setup.

What is an Order Management System?

A trade order management system is basically a digital tool for executing and tracking the progress of orders within the securities market.

When brokers want to buy or sell securities, they’ll do this via some form of order management software.

How does an OMS work?

To buy or sell a security, a dealer must place a so-called trade order, which contains a number of details, including:

  • Which security is being traded (i.e. its ticker symbol)
  • What type of order it is (buy, sell, etc.)
  • The size of the order
  • Additional order instructions

It’s through an order management software that the dealer will typically execute such a trade order. Most OMS trades use a protocol called the Financial Information eXchange (FIX), which drives the majority of transactions in the securities markets.

In addition to this, the order management platform also maintains a record of open and completed orders, providing everyone with a transparent picture of all securities transactions.

Primary features of order management software

In the finance world, OMS solutions serve a few key purposes.

Order execution

This ensures that all the securities trades are executed according to the instructions of the asset manager, broker, etc.

Clearing and settlement

Here, OMS provides a view of all the ongoing and completed orders to facilitate accurate transaction settlement.

Customer database

Order management systems maintain a record of a broker’s customers, their details, and associated securities.

Analysis and reporting

OMS allows traders to evaluate their overall performance and profitability via detailed reporting. Brokers and asset managers can also extract statistics and other indicators to share with their clients.

The relationship between OMS, PMS, and EMS

As if a single acronym wasn’t enough, OMS is often mentioned in the context of two other tools: Portfolio Management System (PMS) and Execution Management System (EMS).

Let’s briefly look at what they are and how they relate to each other.

PMS

Large buy-side investors (e.g. hedge funds) often rely on portfolio management systems to maintain an aggregate view of the market positions of their entire security portfolio. In such cases, an OMS is typically an intrinsic part of this portfolio management tool, helping to turn decisions about asset allocation into actionable buy-side orders.

EMS

An execution management system can be considered a subset of OMS that’s more responsive and allows for precise, time-sensitive transactions. 

An EMS is especially relevant to daytraders who are interested in making frequent real-time decisions and transactions. But in the context of large buy-side companies, there’s often little distinction between an OMS and EMS. They both end up serving the same ultimate end goal: executing trades based on required market positions.

Who uses trade order management platforms?

Unlike the more niche-focused EMS, which appeals to day traders, OMS is typically used by larger institutional investors like hedge funds, asset managers, and brokers. These entities need order management systems to help them manage and streamline transactions at scale. In this space, certain types of OMS can even execute automated trading and allocation strategies based on the broker’s directions.

The benefits of order management systems

OMS platforms have become an indispensable part of an institutional investor’s toolbox. That’s because they have a number of clear benefits.

Scale

With an order management system, investors can handle huge volumes of transactions across multiple markets and exchanges—all from a single, centralized tool.

Real-time trading

OMS tools are capable of monitoring and responding to price changes in real time to execute transactions at the most favorable terms.

Compliance

Because they log and keep a record of every trade throughout its lifecycle, order management platforms are key in ensuring regulatory compliance and transparency. This makes it possible to spot any suspicious activity or regulatory breaches.

Improved communication

Due to this transparency, OMS also improves communication among all parties involved in securities trading, from portfolio managers and traders to compliance officers.

Risk reduction

Thanks to their ability to check and prevent unfavorable or risky trades, these systems also help to reduce the overall portfolio risk.

Cost savings

Finally, because it scales and automates much of the above, an effective OMS will result in significant cost savings associated with managing a portfolio and securities trading.

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How to choose the right trade order management system

If you’re a broker or institutional investor looking for an OMS, you’ll want to consider the following factors. Note that there’s unlikely to be a one-size-fits-all platform out there. You’ll always have to evaluate them in the context of your unique organizational needs.

Pricing structure

This goes beyond the total platform price itself. It’s important to look into the details. How many free user seats does the system support? Are there any per-transaction fees or other variable costs?

Market scope

Is the OMS in question limited in its geographical or market scope? Does it facilitate trades in all types of securities or only specific ones?

Ease of use

In the end, the system is only as helpful as your ability to make proper use of it. Consider how the complexity of its features aligns with your staff’s knowledge and expertise.

Integrations

Do you need a complete off-the-shelf, standalone system? Or do you need a modular solution that supports your existing tools (e.g. PMS)?

Feature set

OMS providers often have multiple products with features that appeal to specific types of investors. These can vary significantly in terms of the allocation models, risk management capabilities, reporting details, automation, audit features, and much more.

Because of this, it’s best to start by creating an internal checklist of must-have vs. nice-to-have features in order to find the right OMS product. This will help you avoid overpaying for advanced features you won’t use while ensuring that you cover your minimum requirements.

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