Waters Rankings 2018: Best Sell-Side Order Management System Provider—Bloomberg

The order management system (OMS) space tends to be associated more with the buy side, thanks to its dominance by a few big names—Charles River, Eze Software, Linedata, and others. But the one company that truly crosses the Rubicon at scale between the buy and sell sides is Bloomberg. For the buy side it has its AIM product, but for the sell side, TOMS is the standard for many broker trading floors.

With over 300 clients, business is booming for the platform, which has had its traditional heartland in the cash and bonds space. Much of the focus, as with any providers of sell-side technology, has of course been on the implementation of the revised Markets in Financial Instruments Directive (Mifid II) in Europe.

One example of how TOMS reacted to the new regulation was with its sales trader workflow, which records the negotiations between salespeople and clients, providing an auditable record of interactions in compliance with Mifid II’s various provisions. Over the past few years, however, a dedicated program of investment has seen TOMS expand its asset class coverage, pushing into the world of derivatives and other exotic instruments. “We’re a considerably more powerful derivatives system now than we were a few years ago, and that continues to develop as we invest,” says Phil McCabe, global head of product for TOMS at Bloomberg. “For instance, over the last 12 months we’ve continued to look at how the user interface explains things like delta, vega and other risk [measures], and how we explain that to our customers through the front-end piece.”

The company has also built-in functionality for calculating XVAs—adjustments made to the fair value of a derivatives contract to take into account funding, credit risk and regulatory capital costs, which McCabe says are now regarded as an “intrinsic” aspect of pricing derivatives trades.

Looking ahead, the further integration of TOMS with other aspects of the Bloomberg stable—as well as third-party systems—is a key objective, in order to realize the potential of a “genuine enterprise system,” as McCabe puts it, along with expanding its firepower in data analytics. “We don’t sell software, we sell connectivity, and Bloomberg is a central part of financial markets,” he says. “So when you’re plugged into data, you’re plugged into reporting, into analytics, insights, news. I think that’s really the key: enable users to trade, to know what’s going on, and really understand why the market has moved. I think that’s what it takes for traders to outperform in these markets”