Over the last decade, cash equities trading has experienced a high degree of technological and business consolidation, driven by the downward pressure on margins in cash equities brokerage. Consequently, trading in cash equities is becoming progressively more competitive and less profitable. To remain viable, agency-brokerage franchises have been forced to commit to a more judicious and proactive technology strategy. Historically, it has been relatively common for agency-brokerage houses to run numerous OEMS and middle office instances across the organization, and for many, addressing the splintered nature of their front-to-back cash equities trading stack is now an important business imperative.
One major reason for the widespread development of fractured trading technology stacks was the emergence of the low-touch trading desk as a distinctive entity from progenitor high-touch trading practices. The low-touch trading approach offered agency-brokerage franchises the opportunity to automate trading and reduce trader headcounts. Automation of flow subsequently led to the emergence of a separate, more technically sophisticated set of functional and business requirements for OEMS products.