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Examining The State Of The OMS Market, TABB Group Deep Dives Into Its Changes, Challenges And Where The Industry Is Heading

Date 05/06/2018

Trade execution at the dawn of the order management system (OMS) era 30 years ago was nothing like it is today, with almost 66% of a buy-side trader’s equity trading order flow channeled via low-touch / electronic trading protocols across 13 US equity exchanges, 30 dark pools and 60-plus internalizing brokers, moving beyond US equities, migrating across geographies and different asset classes, according to TABB Group in “State of the OMS: A Time for Change?”, a new report by founder and research chairman Larry Tabb. It examines the current state of the OMS, how they are keeping up and where the OMS industry is headed.  

The active management buy-side community’s under pressure, says Tabb. Most funds’ success will revolve around efficiency – executional, operational and organizational – with survival revolving around the OMS. “To be competitive,” he writes, “order and execution management platforms are raising the bar. By adding robust execution management technologies and increasing asset class and geographical coverage, we see OMS platforms improving their institutional integration, adding analytics, more fully implementing brokers’ algorithmic suites and new technologies to help traders understand which algorithms to use for different products during different market scenarios.”

While many firms have a heterogeneous, best-of-breed infrastructure, Tabb sees buy-side firms working to consolidate technology stacks, reduce the number of platforms and combine investment and trading technologies onto a single platform. However, he points out, while best-of-breed infrastructures won’t disappear, “it will be difficult for all but the largest firms to remain a best-of-breed shop.”

 As the industry moves forward,” he says, “equity managers will work with their fixed income colleagues, derivatives will become a more important aspect of the money management business and managing money will become a more global enterprise.”  But gaining exposure to various opportunities won’t lie within one asset class as trading opportunities will be found in the interplay between related assets – equities, corporate bonds, sovereign debt and derivatives. “To harvest these opportunities, the buy-side will need a fully integrated environment to drive interpersonal communications as well as the tools to efficiently harvest alpha in all its forms.”

 Seven detailed exhibits support the 19-page report:

  • Exchange vs. Off-Exchange Volume (by exchange group / independents), March 2018
  • European Equity Volume (notional) by Execution-Venue Type
  • Periodic Auction Volumes by Venue, April 2018
  • Buy-Side Trading Technology Spending
  • EMS / OMS by Asset Class
  • EMS / OMS by Geo
  • EMS / OMS Spending and Growth

“State of the OMS” is available now for download by TABB equities, fixed income and fintech clients and pre-qualified media at https://research.tabbgroup.com/search/grid.