Moving Into Middle- and Back-Office Processes

By: Anya Kezerashvili

The next paradigm shift is emerging from the un-sexiest parts of the trading process: the middle and back office. Lagging years, if not decades, behind their highly developed front-end siblings, middle- and back-office processes are slow, inefficient and costly. They are dominated by players with proprietary systems who charge premiums for their services. End-of-day delivery is still a norm.

In some ways, it is almost back to the paper vs. electronic tickets war. The electronic side won the first time around – and now it is settlement instructions and allocations for those tickets that are waiting to be delivered over the same pipe, in real-time, to be processed upon arrival in order to minimize the risk of breaks and fails.

Allocations delivered via FIX are clearly the next step forward. The newer versions of FIX, 4.4 and ultimately 5.0, are able to accommodate the full life cycle of the trade within a single FIX message. As a result, post-trade processing instructions are passed along with the order information, eliminating the chance of mismatching.

Right now the majority of the industry is still running on FIX 4.2, but change is on the horizon. Partnership with SS&C will enable you to take the full advantage of this complex new trend. SS&C has years of expertise in providing middle- and back-office products and services to the institutional markets. With acquisition of Tradeware Global, we have added FIX connectivity network FIXLink® and products and knowledge for supporting the middle- and back-office services of broker-dealers. The combination of expertise in both worlds is the recipe for creating you a strategic advantage.

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