Tora Adds Fixed Income to Trading Platform

Cloud-based trading technology provider Tora will add fixed income capabilities to its suite of trading solutions by the end of the third quarter, says Chris Jenkins, managing director of sales and operations for Asia-Pacific.

“That is what we are working on from now until the end of the year. Then we’ll have a full multi-asset execution platform,” Jenkins says.

Tora provides portfolio and risk management, order and execution management, and compliance and analytics engines, either as an integrated platform or as separate services.

The company’s trading platform already includes functionality for equities, derivatives, and foreign exchange. Jenkins says adding fixed income was a natural progression, considering the electronification of that market.

The platform’s new fixed income tools will be accessed through a tab alongside those for equities, futures, and options, and will be integrated with the existing products for all customers that already use Tora.

Outsourced Trading

Alongside their trading business, Tora also has a broker-agnostic outsourced trading offering. Tora’s outsourced trading can be fully integrated with its cloud-based front-to-back office technology. The spread includes order and execution management systems, embedded pre-trade compliance, pre and post trade TCA, proprietary pairs trader and reporting.

Outsourced trading desks are extensions of asset managers—both traditional and alternative—that do business by trading and executing orders on behalf of their clients. The funds direct their outsourced trading desk to trade a certain volume of securities, and the desk chooses where and how to route the trade. Outsourced traders use their own order and execution management systems and route orders to brokers in their community.

Despite being around for two decades or so, outsourced trading desks have become popular over the past few years as asset managers—struggling to find alpha as investors switch from active to passive strategies—have found themselves needing to cut costs. This trend has been only spread during the Covid-19 pandemic, as pressure on trading continuity has driven in-house desks to look outward.

Tora was founded in Tokyo in 2004. It opened an office in Europe in 2016, followed by one in New York a year later. Jenkins says that since expanding the business to Europe, the firm has started having more conversations with clients interested in fixed income capabilities, as developments in fixed income are spread unevenly across the globe. 

In Europe, the revised Markets in Financial Instruments Directive (Mifid II) has driven interest in outsourced trading. Traders in the region traditionally handed the payment processes to brokers, but this function has been taken away since the unbundling of fees from services such as trading under Mifid II, forcing companies to revise how they handle trading and fees. 

“Over the last few years, we have felt that fixed income was moving at a different pace in different regions. Certainly in the US, it’s much further along than it is in Europe, which is further along than it is in Asia,” Jenkins says.