Operations teams are under greater scrutiny as regulators assume a zero-tolerance stance on post-trade errors. Trading systems should provide the tools required to give firms greater confidence.
Point of View
From Cost Center to Growth Driver
Increased regulation and demanding investors place intense stress on buy-side firms. Tougher capital requirements are driving banks to shore up liquidity and pass through more fees and credit exposure to investment managers. European CSD regulation and shortened settlement cycles amplify the cost of errors and instances of noncompliance, while the Volcker Rule has hindered the ability of banks to cover the cost of failed trades. In other words, the buy-side must now meet increasingly demanding responsibilities with shrinking margins, less time and fewer resources.
Bloomberg Asset and Investment Manager (AIM) can help by transforming investment operations from a cost center into a growth driver. Its post-trade solutions allow firms to demonstrate heightened operational controls to prospective investors, which bolsters investor trust and helps increase AUM. Specifically, AIM offers tools to help firms pinpoint potential errors before they affect the investor, as well as turnkey access to the widest network of matching platforms and settlement agencies.
Data may originate with a custodian, data vendor or internal accounting system, but decisions are typically made according to information in front office systems. Discrepancies between systems not only cost firms time and money, but also raise serious reputational risks. Bloomberg AIM helps operations teams address this issue by ensuring the data within AIM aligns with external data sources and by verifying it using a suite of record keeping tools.
Essential Post-trade Capabilities
Regulatory requirements and shorter trade settlement cycles can amplify the cost of errors and instances of noncompliance for sell-side firms. Seamless workflow driven by consistent, accurate and trusted data is paramount. Consequently, firms depend more heavily on accurate, timely position data to improve trading decisions.
Nevertheless, dealers still struggle with inefficient workflows and unnecessary operational risk. Integration of multiple systems and connectivity points contributes to higher costs. What dealers need are trade enrichment tools that enable the operations staff to pinpoint potential errors as well as OMS platforms with access to a wide range of matching platforms and settlement agencies.
For fixed-income sell-side firms, Bloomberg Trade Order Management Solutions (TOMS) provides robust middle office support, including trade processing solutions and the ability to manage regulatory connections. Within a single workspace, TOMS offers an aggregated view of trade activity and risk, including real-time monitoring and user-customizable reports. To support global trading, TOMS includes system controls to help segregate transaction workflow and counterparty management while significantly improving 24-hour trading capabilities.
For equity sell-side firms, Bloomberg Sell-Side Execution and Order Management Solutions (SSEOMS) improves operational efficiency with automatic trade reporting and real-time alerts for handling trade compliance violations, real-time integration to operations providers and allocation managed through full integration to Omgeo and direct FIX connectivity to the client’s OMS.