An Execution Management System (EMS) interoperability is an application that displays real-time market data and analytics and is used by traders to transact orders. EMS systems were typically built and provided by the sell-side to facilitate electronic orders and encourage preferred routing. In its current form, an EMS allows traders fast, seamless execution with any broker on the street. EMSes support low-latency electronic and algorithmic trading and provide pre-trade tools to block trades outside of compliance guidelines at the point of execution. EMSes allow traders to work the order using a variety of order types, use smart routing, allocate trades and provide intraday cash positions.
EMSes and Order management systems (OMSes) serve two distinct functions. EMSes are used by traders and are execution-driven, focusing on front-office real-time trading. OMSes are used by portfolio managers, traders, compliance, analysts, operations and officers. They solve front-office workflow challenges and interact with back-office systems. The trend in the marketplace has been for OMS vendors to integrate additional trading functionality by buying or building EMS solutions.