The broadened partnership gives SimCorp clients access to Virtu’s ITG Net and Triton EMS as part of its new FIX as a Service offering – and aims to boost both firms’ OEMS ambitions. BEST EXECUTION speaks exclusively to ANDERS KIRKEBY, head of open innovation at SimCorp and MELISSA ELLISA, managing director EMEA at Virtu, to learn more.
SimCorp and ITG Net, [now part of Virtu], have been partners since 2010 through a certified connection to the ITG Net broker-neutral financial communications network.
“The new SimCorp service, powered by ITG Net, aims to give clients broader access to an extensive network of brokers, opening greater liquidity pools for their traders and therefore improving the potential for achieving best execution,” said Anders Kirkeby,head of open innovation at SimCorp, speaking to BEST EXECUTION. The expansion will enable SimCorp clients to utilize ITG Net in SimCorp’s new FIX as a Service offering, as well as tightening the integration of Virtu’s global multi asset-class EMS, Triton with SimCorp’s OMS.
Saas and OEMS
The decision to expand the partnership was rooted in a number of strategic considerations. “Firstly, it aligns with SimCorp’s broader SaaS strategy, which involves offering a growing range of business services to our clients. In this instance, the partnership expansion enables SimCorp to take on the responsibility of managing FIX connectivity on behalf of our clients. This move is significant because it allows clients to offload the complexities and resource demands associated with internal FIX connectivity operations,” explained Kirkeby.
FIX as a Service is a new offering for SimCorp SaaS clients, designed to reduce the operational and technical overhead of electronic trading for clients by removing the need for dedicated in-house FIX capabilities, as well as minimising their operational risk around FIX connectivity, and accelerating the onboarding of new FIX trading destinations.
The expanded partnership is also an opportunity for SimCorp to strengthen its trade execution functionality, with the integration of Virtu’s Triton EMS giving clients access to a global, broker-neutral, multi asset-class platform combining liquidity, execution, analytics and workflow solutions.
“This expansion is an opportunity for SimCorp to enhance our order management capabilities by incorporating another leading EMS provider,” confirmed Kirkeby. “By carefully selecting a small group of top-tier trade execution management systems, SimCorp ensures that its clients have access to robust and scalable order execution and automation capabilities to enable traders to deliver great execution even on the busiest trading days.”
Optimistic outlook
The partners are expecting a strong take-up for the service, both from new and existing users.
“We anticipate the majority of our new front office SaaS sales and SaaS migrations to opt for our FIX as a Service offering, powered by ITG Net. Early feedback from clients has been positive, as evidenced by our successful onboarding of our first US client with our service and partner,” revealed Kirkeby.
ITG Net was acquired by Virtu Financial back in 2019 as part of its US$1bn takeover of agency broker ITG. The integration since then may have taken some work, but the results finally look to be paying off.
“The acquisition of ITG by Virtu has offered huge benefits to our clients in terms of investment in technology, data and expansion of execution capabilities. Since the acquisition, we’ve completed a rewrite of both the front-end and back-end of Triton, enhancing global resiliency and scalability for our clients’ global trading desks as well as speeding up the deployment,” said Melissa Ellis, Virtu’s EMEA managing director, speaking to BEST EXECUTION.
Best execution
When it comes to best execution, Virtu’s priorities are focused on liquidity and automation, explained Ellis. “Partnering with SimCorp to provide our FIX Network, ITG Net to its clients gives them access to over 700 counterparties across asset classes. Using our execution planning tools, such as rules-based auto-routing and algo wheels, clients can automate appropriate flow to these counterparties to lower operational risk and improve outcomes,” said Ellis.
“Virtu was a multi-asset financial technology firm from the beginning, so ITG’s legacy products were able to take advantage of Virtu’s existing expertise and global reference data to strengthen both Triton and our analytics offering in FX and fixed income, creating an EMS that gives a consistent process around best execution with integrated best of breed products for both trading and analytics.
“Lastly, consistent data capture and pre-trade, in-trade and post-trade data is a critical element to having a reliable best execution process. Offering clients a seamless SimCorp and Triton EMS integration while providing a robust best execution process enables uniformity, can save cost and reduces the amount of time and resource required on the client-side.”
The partnership follows the regulatory approval last week of Deutsche Borse’s acquisition of SimCorp, confirmed on 24 August and with the offer period set to expire on 19 September. The deal is expected to be settled and completed by 29 September 2023 at the latest.
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