Brown Brothers Harriman (BBH) has launched FX Orderview, an electronic limit order management system, developed in association with TMS Monarque, according to Henry Wilkes, head of FX, at BBH London.
BBH says FX Orderview will help clients streamline the limit order process and track the status of orders in real time, around the clock. The bank has designed standard order entry screens, and clients can also import orders from their own order management systems. The system is simple to use, in effect merely replicating the current process that clients go through on the telephone and fax for example. Stacey Seltzer, assistant vice president, FX, at BBH London, says, “The idea is to work with the clients and develop products they want, thus making trading with BBH easier. FX Orderview simplifies the process of placing orders by reducing errors and building on STP efficiencies.”
The process for placing orders is fully customisable, so users can set defaults to replicate an order or place a series of orders much quicker than previously possible, says Wilkes. He adds that the system can manage orders in more than 75 currency pairs.
The order types available are vanilla stop-losses and take-profits, one-cancels-other (OCO), OCO dependent, and ‘call levels’. Clients can place these on a ‘good until’ basis by entering a time or date of expiry for each individual order. Once an order is placed, BBH signals acceptance and the order is then ‘live’. In the event of a major market-moving event that would necessitate the removal of all orders, clients can achieve this by a single click – a ‘panic button’ for wont of another expression. Each order is given a reference code by BBH, so to alter details a client can click on the code to bring up the order for adjustment.
The system provides a blotter listing client orders which is fully configurable by currency, value date, individual dealer or currency pair, as well as type of order. There is also a ‘memo cell’ on the system for specific instructions regarding individual orders. Orders can be sent piecemeal or en masse, selected for transmission by a single click. Client screens contain a descriptive box which details the type of order being placed, to ensure clients have a clear understanding of the type of trade they are placing.
Once an order is executed, it can be sent directly to the client’s treasury management system (TMS). Confirmations are exchanged automatically.
Wilkes stresses that client demand played a major role in driving the development forward. “We only release products that help to provide solutions that meet client requirements,” he explains, “We are not just rolling out functionality for the sake of it. We work with clients to link FX Orderview into their own portfolio management system, which means they do not have to input their orders twice, they can simply upload them from their own system.”
Wilkes notes that FX Orderview offers 128-bit SSL encryption, digital certificates and unique user names and passwords. However, orders are executed by BBH dealers, not electronically. Wilkes says this averts the kind of problems that can emanate from mis-hits in the market, as seen recently, for example, on Eurex. He adds that the fact that the dealer is still involved in the process ensures that clients get “a high quality service with some flexibility”.
“Most of our clients want the maximum market protection, and subject to market conditions, we can always deliver execution at the order price,” Wilkes says, “The fact that our dealers are still involved in the process protects our clients from mis-hits on one or more of the most widely used trading systems that have increasingly become the benchmark for the market. We provide the type of value-added service that a computer simply cannot replicate.”
Building Efficiency on the Bank Side
On the BBH side of the equation, the orders are managed from the bank’s 24-hour dealing desk in New York. Whilst the bank has regional sales desks in a few key centres, all trading is out of New York, with three shifts providing coverage from the Wellington open on Monday morning, to the North American close on Friday. European business is, says Wilkes, “growing strongly”, and likely to continue to do so as more clients are ‘onboarded’.
The system has a built-in rate feed for BBH dealers, which not only ensures that client orders are on the correct side of the market when transmitted (incorrect orders are automatically bounced back to the client for correction), but also means that the orders can be colour coded according to their proximity to the market. Wilkes says that the colour coding on a big screen makes for easy recognition in the bank’s dealing room, especially for the manager overseeing the operation. Individual dealers have the system on their desktops, which is also fully configurable. Wilkes says this is especially useful for those occasions when a dealer has to look after two books.
The bank says it is also developing a solution to provide streaming indicative BBH rates. Wilkes says that FX Orderview provides an efficient order management tool, so the trading room manager at the client end can, he explains, “receive real time information on the status of the organisation’s order book”. “The manager can also log onto the site from any location, subject to the appropriate security measures, and adjust orders seen as necessary,” he adds.
Full Control for Clients
The system is in operation ‘24/7’, aside from Christmas and New Year’s Day. “This means that the client can adjust or simply remove orders at any time, even over weekends. Market moving events can, and regularly do, occur at weekends, so FX Orderview means that clients can maintain full control of their book, and have their orders in place before the market opens on Monday morning,” says Wilkes.
The system is aimed primarily at fund and asset managers, who make up the bulk of BBH’s client base “although many banks do already use it,” adds Wilkes.
“Although we see the advantage of transitioning as much client business online as possible,” he continues, “This system is about more than just that. We stress to our clients that we do not want to lose contact, merely to enhance the relationship using the efficiencies of STP. There is still a lot of human interaction in the bank/client relationship. Our intention is to develop and strengthen relationships with our existing clients, as well as adding new clients and developing a similar relationship with them. Ultimately it comes down to the personal relationship management touch, ie, looking after your client to the best of your ability.”
BBH are among the frontrunners in the race to develop electronic order management systems for clients, a field in which we can expect rapid development over the coming months. FX Orderview takes a healthy mixture of the human/computer input in the process to ensure that clients receive the best combination of STP efficiencies with a ‘common sense’ approach, says Wilkes.
“We have a responsibility to our clients,” he continues, “We obviously cannot guarantee fills ‘at the price’ in certain market conditions or circumstances, but clients know they are getting the best possible execution. Whatever we do, we are consistently delivering a competitive service on executions and orders. FX Orderview is not about changing how we run our order book; it is about making that operation more efficient.”