Following the appointment of David Quinlan, an 18-year veteran of Eze Software, as the company’s executive managing director of EMEA with responsibility for business development and a focus on the needs of growing numbers of EMEA clients within the scope of Markets in Financial Instruments Directive II (MiFID II), we caught up with Quinlan and director of sales engineering, Adam De Rose, to discuss the company’s MiFID II capability and find out a little about its technology plans.
De Rose leads Eze Software’s MiFID II solutions business and is working with around 70 of the company’s 2,000 global buy-side clients that fall within the scope of the regulation. The company’s MiFID II focus is on transaction and trade reporting, best execution and commission management. Its transaction reporting capability is based on its order management system, Eze OMS, which has been developed with logic for MiFID II reporting and interfaces to Approved Reporting Mechanisms (ARMs) including UnaVista, TRAX, and Abide Financial’s NEX. De Rose says the company has started user acceptance testing of the transaction reporting solution with beta clients and expects all 70 to be at the acceptance testing stage in the fourth quarter of this year.
The company’s trade reporting solution is also an extension of the Eze OMS, which has been interfaced initially to the TRAX Approved Publication Arrangement (APA). Acknowledging that some clients also use the company’s execution management system, Eze EMS, this too has been interfaced to TRAX. De Rose is prioritising TRAX as an APA as it was first to offer acceptance testing, but e is working to interface with other APAs.
Best execution is based on Eze EMS and partnerships with OTAS Technologies and Trade Informatics. The OTAS partnership integrates real-time data analytics and market intelligence into Eze EMS, providing exceptional activity analysis and using artificial intelligence and Big Data techniques to translate unusual market movements into actionable real-time alerts and signals. The partnership with Trade Informatics enhances Eze Software’s transaction cost analysis (TCA) offering with access to Trade Informatics’ post-trade analytics that can assess execution performance against key and custom benchmarks.
The MiFID II commission management piece is a cloud-based platform designed for buy-side firms and covering the full commission management lifecycle from research evaluation to budgeting, unbundling and payments.
De Rose expects firms using the company’s four MiFID II solutions to be compliant by the January 3, 2018 deadline, and notes that many are US based firms that cannot avoid MiFID II by being registered as alternative investment funds under the EU’s Alternative Investment Fund Management Directive (AIFMD).
On the technology front, Eze Software is working with Amazon Web Services (AWS) to step up its cloud computing capability and meet demand from hedge funds and, increasingly, asset managers for cloud solutions.
The company already hosts its investment management solutions in a private cloud, but says its work with AWS is a ‘radical rethink’ driven by hedge funds and an opportunity to put all its solutions and next generation tools in the cloud. Quinlan says a few hand-picked US clients will be first to use the beta version of AWS-based cloud systems this year, before the systems are made available on a global basis. He plans an aggressive push on cloud solutions in 2018 and says the company is also working with Microsoft Azure and talking to Google. The challenge, he comments, remains the jurisdictional issue of where data is.