Real Talk: What's Actually Moving Fixed Income Right Now

Hey guys, this is Ashok Mittal, CEO and founder of Fintech Global Center. I've been building trading systems for the last three decades. Trillions of dollars have flowed through the systems that I built. Every major bank in the world has transacted on the platforms that we have built, run and managed.

Fixed income trading, as everyone knows, is on the rise. The question is: have trading and trade management systems kept up with what is needed?

Let's take the different constituents of a company. CEOs and heads of trading are constantly struggling with the increased cost of trading. With legacy fixed income trading systems like TOMS, the prices have continued to grow, and fixed income trading costs have continued to grow. The challenge for them is how to maintain the profitability that is needed. Fintech Global Center's fixed income trading and trade management system, FGC TMS, is more than 50% cheaper than traditional fixed income trading systems.

Let's talk about chief operating officers. They have a different kind of challenge. The operations team needs to keep an eye on trades as they occur. Are we clearing? Are trades clearing on time? Are they getting reported on time? What is the P&L? What is realized P&L? What is unrealized P&L? What are the payouts? They have disparate systems that they have to pull together to generate those reports, and sometimes they get stuck late in the day just to reconcile and make sure that trading for the day has completed.

Fintech Global Center's trade management system solves all these problems in a coherent and easy way. Operations can look at all the trades in real time. They see the status of clearing almost instantaneously. They see how the trades are getting reported. They can manage trade-by-trade positions and P&L consistent with what the trader is seeing, so there is no confusion in calculating P&L and payouts at the end of the month.

Compliance continues to struggle in the fixed income trading world. There are several events they have to watch out for, and managing risk limits is not an easy job. Fixed income trading is difficult. Your risk management requires you to know your volume and your duration across the different products you trade. There are a lot of different rules. People are afraid of the regulators to some extent, and the reason is that they are strict in making sure that a fixed income trading business is managed the way it needs to be. In our experience, if you can show a regulator that you have a handle on what's going on in your business, and that you manage risk and compliance events on a regular basis, they are reasonable as well.

The system allows a compliance team or compliance officer to set all sorts of limits, by trader, by trading desk, by asset class and by client, and to monitor those risk limits in real time.

Let's talk about traders. The number of ECNs where you can trade has continued to grow. Every time you turn around, there is another enhancement to the protocols you trade with, whether it's RFQ, a central limit order book or portfolio trading, and liquidity is fragmented across multiple venues. How do you manage your positions?

Traders have two core tasks: deciding what they want to trade, and then executing it. Customizing that is extremely difficult, because the current systems are not flexible enough for traders to tailor trading to what they want to do and how they want to trade.

Fintech Global Center's TMS allows a trader to trade across all the ECNs and all the different protocols out of the box. And this is where the magic begins: because of our expertise in building trading systems, we can customize your trading flow to suit your needs, which is not possible in most other systems.

A trader can look at their positions and their P&L, realized and unrealized, based on mark-to-market and other methodologies, all on one screen. You can look at all your accounts, the positions in all those accounts, and how you acquired any position, all the way back from when you started trading that security to where you are today, very easily and quickly, with a few clicks. No more multiple sets of commands and multiple screens just to see what you own.

You can make a quick decision about what you want to trade, and then, in a consolidated way, whichever ECN and whichever protocol you want to trade with, the system gives you a comprehensive view of where the market is and what makes sense. The system is designed with the efficiency of the trader in mind.

How is Fintech Global Center's TMS different from what is out there? We believe a lot of existing players, and the new players coming out, are focused on the front-end part of fixed income trading. Fintech Global Center took a different approach. We said there needs to be a comprehensive front-to-back system. That means I need to be able to trade everywhere I want to trade. I need to know my accounts, my positions, my P&L and my average cost. How do I clear? How do I settle? What is the status of reporting?

We are probably the only company I know of that does three-way reconciliation: what you traded, what you cleared and settled, and what you reported, all on one screen. That means the chances of errors go down drastically. It is one view for the entire company.

Traditionally, fixed income trading is almost like the elephant in the room. The different groups in your company, whether it's compliance, operations, traders or trading managers, are all looking at different parts of the business differently. They have different systems and different tools. What we do is bring all of this together so that the entire company has a single view, whether it is trading, trade management, risk, compliance or operations, all in one system. That is different from what you see out there, and all of this at the lowest cost possible.

In short, if you want to reduce your cost of doing business, and you want a comprehensive system that serves not only your needs of today but keeps you ahead of the curve, making the latest set of tools available to your entire company in a single system, that is FGC TMS. Call us today for a demo. You won't be disappointed.