At the beginning of the 21st century, many firms did not have trading systems for most publicly listed securities – some had equity trading platforms or fixed income, but a standard platform that managed all listed security types was elusive. Firms used Excel, a fax machine and a telephone for order placement and management. Failure rates in some firms were as high as 40% due to missing data, incorrect account direction, counterparty mismatches and other trade data quality and timeliness. Equities settled on a T+5 basis at that time and advancing to settle in shorter timeframes with fragmented and highly manual trade processes was elusive. Most buy-side firms had the acquisition of a consolidated OMS that handled all listed asset classes and – ideally – did pre/post trade compliance, and some rebalancing was a top priority. Platform and corporate culture changes to handle this modification of how trading occurred was long and painful for many firms, especially on the change of trade execution and checks and balances for compliance in advance/arrears.
Acknowledging the fact that nothing good happens between trade execution and settlement, the industry set a mandate to move to T+1 in 1999 in an effort to mitigate exposure risk from unsettled trades and partly as a reaction to the long-term capital management crisis of 1998. This goal was finally achieved in North America in 2024, as the struggle to get there took over two decades in most jurisdictions with necessary changes to technology, data quality and less reliance on batch processing. With the 2-decade investment in automating listed securities trades, execution has become as perfunctory as settlement.
Fast forwarding to 2025, firms looking to move to cloud-based platforms and transform their operations to reduce cost and increase efficiency with technologies such as digital offerings, robotic-processing automation and AI are being examined. Business challenges such as ESG, increased regulatory compliance and agility for portfolio construction decisions and what if analytics are taking the spotlight. With the move to T+1 and onwards to T, the heavy lifting in the front office has moved from trade execution to these business items that involves both listed and private securities. The value of bundled OMS platforms is under scrutiny for front office needs and examining the value proposition compared to business role and risk it solves for functions is put on the table for many firms. Recognizing the shift that has occurred with risk now moving to portfolio construction, monitoring and compliance, not trade execution.
Rimes have seen this trend for a few years now with the adoption of asset allocation, rebalancing and exposure analysis in our front office platforms that are agile and asset agnostic. Firms are retaining or adoption OMS for execution and trade ticket execution, but the heavy lifting for creating portfolio management and trade baskets is being done on Rimes platforms. Combined with offerings for ESG, robust and cost effective lakehouse structures amongst other platform and data offerings provided to analytics and front office roles, Rimes offer a unique footprint of capabilities.
