A long time coming

EMSs have become the must have platforms on the buy side, offering a front-end comprising a trading blotter, connectivity to liquidity pools, market data feeds, and a network of counterparties. Fidessa is one such product that was finally launched into the buy side some 18 months ago. By Victor Anderson

Company overview

Royalblue, the technology company behind Fidessa, was founded in1981 and is listed on the London Stock Exchange. It is headquartered in London and has regional offices in Paris, New York, Hong Kong, Tokyo and Toronto. The firm posted revenues £74.2m in 2005 with an operating profit of £9.6m; its 2006 mid-year update reported both revenues and profit growing at 30% over the preceding year.

Fidessa, which has been around since the early 1990s as a sell-side focused trading platform, was re-engineered with the buy side in mind and launched into the buy side in mid-2005. It comprises:

- An execution management workstation designed for buy-side trading desks

- A member trading platform, designed for sell-side brokers

- A connectivity network connecting the buy and sell sides

Market data is integrated into the Fidessa product suite, and the Fidessa network provides access to over 170 brokers, 750 buy-side firms and 68 exchanges around the world. Fidessa is available as a managed platform running in one of the firm's European, US or Asian data centres. Fidessa supports over 85% of global, tier-one equity brokers and serves over 9,300 users at over 260 financial institutions worldwide.

The Fidessa Workstation Execution Management Service (EMS) is an independent, multi-asset, broker-neutral trading platform designed for straight-through-processing of trade orders and executions. It is delivered as a managed and hosted service that can be integrated with a client's portfolio/order management and back-office systems (see user comments opposite). Fidessa EMS can also receive external client orders via the firm's normalised FIX network.

Fidessa's network links users to the DMA (direct market access), algorithmic and care order services of approximately 170 brokerages worldwide. Each order entry screen is designed in collaboration with the broker concerned to ensure that users have access to markets through displays they are familiar with.

Fidessa users can receive Indication of Interest (IOI) and Trade Advert (TA) flow directly from their broker network helping them to identify liquidity pools and to minimise market risk; IOIs can be selected and traded back through the broker concerned. According to the vendor, Fidessa's integrated and tradable IOIs ensure that buy-side traders have the highest visibility of price improvement and off-exchange liquidity. Real-time, multi-asset market data is integrated into Fidessa including news, fundamentals, charts and historical trade time and sales displays.

Who it's aimed at

- Hedge funds

- Proprietary trading desks

- Traditional investment managers

- Private banks

- Mutual funds

Fidessa EMS operates a licensing model based on software, services and broker connections. It also offers a flexible pricing model for its market data allowing users to pay only for the data they use from the source of their choice as opposed to a flat fee for a variety of feeds.

- Trading Screen

- Bloomberg

- Realtick

- GL Trade

- Portware

- Flextrade

The Fidessa EMS front-end is a Microsoft Windows 'thin-client' application – the only part of the system residing in a client's IT environment. The front-end application is designed to be downloaded and updated via Fidessa's network of data centres across Europe, Asia and the US. This, according to the vendor, negates the need for any onsite infrastructure, minimises regulatory compliance, and ensures that users have the latest version of the software available. As previously mentioned, Fidessa has its own FIX network with connectivity from the client to Fidessa available over the internet, dedicated leased lines, or through third-party connectivity networks. Fidessa collects real-time data for all major markets from source and has a number of direct links to exchanges as well as other key sources of data.

Fidessa has been developing and supplying trading, market data and global connectivity services for 25 years. It describes itself as a "broker-agnostic" technology company providing "independent" connectivity to over 170 brokers globally. This provides Fidessa EMS users with non-conflicted global connectivity and ensures confidentiality for trading strategies – a priority in the hedge fund space. Fidessa acts as a portal for order execution, whereby, from one screen, users can access all brokers rather than having different products that 'talk' to each broker.

Hugh Warrender is the London-based chief executive of Williams Trading, an outsource trading desk headquartered in Stamford, CT, founded in 1997. Willaims' UK operation manages the firm's international (non-US) equity executions on behalf of its clients. According to Warrender, Williams Trading implemented the Fidessa EMS mid-way through last year (2006), replacing a number of broker-supplied trading front-ends. "The implementation was very quick," he says. "We were up and running within a month and it could have been quicker were it not for the brokers involved being slow."

Williams was looking for an EMS tailored to its needs – "not a platform that does much more than we need it to do", Warrender says – which was the case with a number of competing products and were, by definition, too complex for the firm's needs. "At the same time, Fidessa has the versatility to adapt to the various markets and styles we are trading," he adds. "It allows us to have a single platform to implement multiple brokers, which leads to uniformity and it also creates a simple solution for us to connect electronically with our OMS (EzeCastle Traders Console)." >

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