What EMS has to Offer Fixed-Income Trading

Capital Markets CIO Outlook | Wednesday, February 03, 2021

With the fixed income market ushering in transformations, advanced Execution Management Systems (EMS) will see many takers. 

FREMONT, CA: Fixed income trading is finally shedding off its slowness and scaling up the use of advanced technology across operational processes. In doing so, it is also discovering the potential of advanced Execution Management Systems (EMS), which can modernize many aspects of fixed income trading. While some might still go in favor of an Order Management System (OMS), an EMS can be an excellent addition in the evolving landscape of fixed income. Listed below are some of the remarkable aspects of a fixed income EMS. Read on to find out the value a modern EMS can bring to fixed income trading.

• Enhanced Transparency

Request for Quotation (RFQ), the conventional way through which fixed income trades take place, does not allow much transparency. The lack of transparency subsequently affects price formation. These are the result of a lack of access to data. The deployment of an EMS allows buy-sides to access critical information in real-time. All aspects, including liquidity, prices, and opportunities, are then available to the traders through integrated views spanning across large datasets. Thus, EMS adds transparency to fixed asset trading.

• Opportunities for Automation

Once transparency is effectively achieved, advanced execution methodologies can be easily adopted to enhance trading capabilities. With EMS, aggregation of data records from various sources becomes possible. By performing analysis over the integrated datasets, it is possible to derive insights and rank quotes. Summarizing the results of the analyses leads to the creation of a system that allows automated dealer selection, as well as trade execution.

• Intelligent Trading Desk

An EMS can make the trading desk intelligent for fixed income traders. Apart from the unified view of the market that EMS provides, the solution also helps identify bonds that have a higher potential in the market. The availability of screening tools allows an EMS to capture, save, and act on available opportunities.

From helping traders assess the bonds that are likely to trade faster, to facilitating automation, EMS does many things that can benefit fixed-income trading. Thus, in the modernizing ecosystem, EMS is powering the holistic development of fixed income trading.

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