LSEG to sunset Redi EMS in favor of Tora

London Stock Exchange Group is planning to sunset its Redi execution management system in favor of its Tora offering, WatersTechnology has learned.

WatersTechnology understands that LSEG will wind down its support of the legacy EMS by the end of 2025. As part of the transition, Redi users will need to create new integrations with downstream systems—i.e., order, risk, and/or portfolio management systems. Two Redi users who were alerted to the decision last year say they are currently exploring their options—either switching to the Tora order and execution management system (OEMS) or turning to a rival EMS provider.

Tora was acquired by LSEG in 2022 for $325 million. It was seen as a “hefty” sum considering that the vendor’s clients are largely based in the Asia-Pacific region, with a heavy emphasis on Japan, sources said at the time. But Dean Berry, then the group head of trading and banking solutions at LSEG, told WatersTechnology at the time that Tora complemented Redi nicely, as Redi has a strong presence in North America. Tora also helped LSEG expand its fixed income, foreign exchange, derivatives, and cryptocurrency execution coverage.

“A key theme we are seeing from customers is the demand for multi-asset coverage,” he said. “When we talk about multi-asset, that ‘multi’ piece is getting a bit wider—it’s not just your classic asset classes.” 

LSEG declined to comment for this story.

Berry also noted that he thought Tora could be integrated into LSEG’s suite of services relatively easily because it was “built on a more modern tech stack.”

Still, the move to fully sunset Redi caught some customers and industry observers off guard. For one, the two platforms have “vastly different” user interfaces and workflows.

“Traders, when they get accustomed to a system, they often don’t like change,” says one industry source with knowledge of the EMS space. “They have their settings, their layouts, and their color schemes just the way they like it. … [Being forced to migrate] opens the door for them to take a look at the crowd” of EMS providers.

Simple clients will likely just move to Tora, but anyone who is sophisticated or large will likely use this opportunity to look at another platform

Industry source

If Redi users do decide to make a switch, those who stand to benefit the most are Bloomberg and its EMSX offering, considered to be the largest provider by market share; FlexTrade; Neovest, a subsidiary of JP Morgan; TS Imagine; SS&C Eze; and FactSet’s Portware platform, which were the names most mentioned by industry participants interviewed for this article.

“Simple clients will likely just move to Tora, but anyone who is sophisticated or large will likely use this opportunity to look at another platform,” says a second industry source.

And a third industry source says Redi users have expressed concern to them because of Tora’s Asia-Pacific focus.

“Tora has a much smaller client base [than Redi] and it’s primarily focused on Asia-Pacific—but it is the de facto, go-to EMS provider in the region,” says the third source. “But Redi is a good platform—it’s tried and tested, and users trust it.”

There are four theories as to why LSEG chose Tora over Redi. First, as Berry told WatersTechnology after the acquisition was announced, Tora, which was founded in 2004, is built on a more modern tech stack than Redi. While not “built on the cloud,” prior to being acquired by LSEG, it had invested heavily in cloud modernization and API delivery, whereas sources say that Redi, which was launched in 1992, isn’t as sophisticated from a modern tools perspective.

Second, many of Tora’s senior managers who were at the vendor at the time of the acquisition are still with the firm, and sources with knowledge of LSEG’s thinking say they’d be better positioned to drive future EMS product development. Redi’s senior managers from when it was acquired by Thomson Reuters in 2016 (later Refinitiv) have left.

Third, and as noted before, Tora has wider asset coverage—including important growth areas like crypto and fixed income—so it makes sense to lean into that product. As buy-side firms look to diversify and spread into new investment vehicles, they are looking for a single platform that can help them execute in an array of areas, rather than the expensive proposal of stitching together “specialist” systems.

Finally, it comes down to basic economics—it’s costly to maintain multiple execution systems, and if one product (in this case, Tora) has more modern capabilities (e.g., cloud and APIs) and asset class coverage, it’s easier to develop that product rather than modernize a legacy system.

Still, sources note that it’s a risky proposition to sunset a product, and, essentially, force users to migrate off a system they are comfortable with. It gives people a reason to scan the market, says the second industry source. “Maybe they weren’t quite happy with the old system, but they also didn’t want to go through the pain of disrupting their traders,” which requires significant training. “If they’re being forced to do that anyway, you might as well look around.”

The first industry source estimates that for a large asset manager to switch to a new EMS provider, the time from the evaluation process beginning to signing a contract to migration completion can take anywhere from six to 18 months, depending on the complexity and size of the user’s needs. From contract signature to go-live, four to six months is the norm.

They also emphasize, though, that Redi users need to consider the fact that not only are they going to have to switch to Tora, they will also have to integrate that EMS with other systems downstream. They note that there are often connectivity issues, symbologies don’t match, perhaps the version of FIX that the Redi integration used is different from Tora’s, or there are nuances within the FIX language.

“There are typically teething problems when integrating with systems downstream and these projects can be a headache,” they say.

LSEG has been on something of an acquisition tear over the past five years, most notably with its acquisition of Refinitiv, which was worth $27 billion and which also brought with it the Redi and FXall—a specialist EMS—franchises. Acquisitive firms have two choices: run the companies that they’ve acquired as separate units (think: SS&C Technologies and Ion Group) or be militant about assimilating acquired companies with deep integrations (Bloomberg or Nasdaq, for example).

While both strategies have advantages and disadvantages, the chief information officer at a US bank with almost 40 years of tech experience in the capital markets says that when there’s significant overlap between two systems, sometimes you just have to pick one and trust that users will understand.

“I guess it’s a risk” for LSEG to sunset Redi, says the CIO. “But also, when you consider cyber security concerns, the need to make constant patches, the cost of keeping multiple dev teams together, and the need to be able to embrace AI—just look at the generative AI boom—at some point you have to rip the Band-Aid off and pick one.”

Additional reporting by Wei-Shen Wong