An execution management system (EMS) is an essential component for any equity based hedge fund. A strong trade management and execution system facilitates the creation, implementation and modification of trading strategies and algorithms on-the-fly.

Our client, global macro hedge fund was in the phase of growing assets under management and the execution desk didn’t have the capacity to handle the additional order flow from the numerous portfolio managers being added to the team.

The client needed a scalable application that would cover the multiple products traded on a daily basis in both a single security and basket trading capacities. Also, the client is one of the few hedge funds that went public and they needed to build compliance features into the application to satisfy the regulators and make trading decisions more efficient for the traders.

FinServ provided a seasoned and deeply industry experienced project manager to ensure the client successfully integrated the third-party vendor software. The team consisted of professionals from the client and from the third party vendor. In addition to overseeing the project, FinServ was responsible for documenting all the business requirement and orchestrating the custom development, testing and release of the finished product to the front office, operations and compliance.

In regards to compliance, the application was built to provide the traders with real-time security positions and prevent them from placing orders in securities on their internal restricted list or on the banned short sale security list enforced by the SEC and FSA in late 2008.

The EMS system provided the execution desk traders with the ability to handle higher trade volumes and with this increased efficiency management was able to add additional portfolio managers to the team without having to hire additional traders. The EMS was built with custom compliance features to handle internal policies and procedures and external rules and regulations. Ultimately, this sped up the time for traders to execute trades because they no longer had to spend time to research if a security could be bought or sold.

The front office benefited by being provided with a multi-asset class EMS that enabled the group to trade products electronically. The EMS was connected to a network of twenty sell-side broker/dealers for equity trading and each destination covered cash, portfolio and direct market access trading desks. The EMS connected to three ECNs for foreign exchange trading and it provided the trader with a single pool of liquidity for the trader to sweep with the click of a button.