Trading Systems

Trading systems compromise of 3 components

• Portfolio Management System
• Order Management System
• Execution Management System
  

System Flow

• PMS
  • Portfolio Managers determine target weights and out of that, Parent Orders.
  • Pre-trade compliance checks on Parent Orders
    • “What if” analysis if trade is put in
  • Checks for sufficient cash availability
  • Sends Parent Orders downstream to the OMS
  • Post-trade compliance checks on Parent Orders.
• OMS
  • OMS receives Parent Orders and split them up into Child Orders
  • Empty Allocations records are created
  • Sends Child Orders downstream to EMS
• EMS
  • EMS receives Child Orders and split them up into Executions
  • Executions sent to market and Broker Order created
  • Market returns back with Fills
  • Executions updated with incoming Fills
  • When the associated Order’s is “complete” (i.e, partially complete, totally complete, order no longer need to be actioned upon), then Broker Order be formed from Fills from each Executions.
  • Broker Order passed to Back Office for settlement
  • Fills are passed upstream to OMS
• OMS
  • Fills received, and Child Orders are updated to match
  • Allocations filled from Fills and sent to Back Office for settlement
• PMS
  • Parent Orders are updated.
  • Positions updated