The EMS’s sole responsibility is to directly access the market via the FIX protocol send out Executions, and wait for Fills. Fills are aggregated into Broker Orders, which will be passed to the back office and are also passed back upstream to the OMS.
Execution Flow
- EMS receives Child Orders from OMS
- Each Child Order is broken into one or more Executions (Eₓ)
- Each Execution is sent to a Counterparty (broker/exchange) via FIX
- Counterparty returns Fills (Fill₁₁, Fill₁₂, …)
- A single Execution results in multiple Fills (1:n)
Broker Order & Reconciliation
- Available Fills are aggregated (n:1) into a Broker Order (B₁, B₂, … Bₙ)
- Broker Orders are sent to brokers and exchanges for reconciliation
- Broker Orders are also passed to Back Office for settlement
- Fills are forwarded upstream to OMS for Allocation population
FIX Protocol
- Stands for Financial Information Exchange Protocol
- Industry-standard messaging protocol for real-time securities transactions
- Used for order routing, execution reporting, and post-trade communication
- Enables EMS to communicate directly with brokers and exchanges