Integrating automation within your primary market operations

Published on 5 September 2019

By increasing the level of automation that traders and portfolio managers can access in primary markets, asset managers can increase engagement and access to allocations. This requires careful alignment of systems, counterparts and data flows. In this video, the third in a three-part series with Herb Werth, managing director at IHS Markit, we discuss how his firm supports a range of integration models in order to support traders in managing this process.

Dan Barnes Welcome to Trader TV, talking with IHS Market about the impact of operational risk on primary market trading. I’m Dan Barnes, and with me is IHS Market’s, Herb Werth. In our previous videos we reviewed some of the applications that IHS Market provides to help manage new issue workflow. Herb, those applications seemed pretty comprehensive. Are your customers asking for more?

Herb Werth Well, our customers are always asking for more and that’s a good thing. Probably the most common request that we get is to take what we have integrated into the systems and processes that they have today.

Dan Barnes That’s great, thank you. And why is technology integration such an issue in the primary market process and what are the benefits it brings?

Herb Werth Well, remember, what we’re trying to do is increase efficiency and reduce operational risk, and by taking the platform that we have and integrating it into the systems that the customer already has, we eliminate things like re-keying of information. We make the process more efficient because information just flows between the systems that are necessary to place orders and clear trades.

Dan Barnes Understood. And are there different ways of integrating?

Herb Werth There are, and it really depends on what that client is trying to accomplish. And so, fx if a client has an existing workflow for secondary market trading, they may want to have a primary market workflow that is similar to that. So, we understand that, and then we look at ways that we could plug into to that workflow, and into the systems that they have in order to accomplish the goals that the client has.

Dan Barnes Why would clients have different ways that they need to integrate? How do you accommodate that?

Herb Werth That’s a great question. Clients today have existing workflows for secondary market trading and they’re looking to leverage that for primary market trading. And so that means that they have outsourced OMS, perhaps. They may have an EMS, they may have a risk system or compliance agent, and we need to figure out what’s the best way to plug into that. There’s a few ways that we can do it, so, if a client has a very simple requirement to just take the trades that come out of the primary markets workflow and book them into their trading system, we can provide that through either a trade export or a drop-copy that could then be processed downstream. If their OMS is more sophisticated, it could handle the primary markets workflow, and they want their portfolio managers to place orders from the OMS, their traders to aggregate those orders and simply interact electronically with the market. We then have the ability to provide the information to the OMS to create the security, and then we could take those orders electronically, pass them through our investor access platform and pass their allocations back. Often though, what we hear is clients want the best of both worlds, so, their portfolio managers and their analysts and their compliance people are very familiar with their OMS. They’d like to get the information into the OMS, create their order, perhaps check compliance, pre-trade, do any kind of pre-trade modeling that they would do, and then send those orders to the trading desk. The trader has a challenge that they need to aggregate those orders and understand the firm’s demand, and pass that information to syndicate and get it back. And so, our primary indication management module, could serve as the traders’ workstation in that case, but still integrate with the OMS. And at the end of the day, when those trades are complete, pass those trades back to be booked. And so, we essentially have three different options based on the appetite of the client, and the technical capabilities of their infrastructure.

Dan Barnes That’s very good. So, basically they can be comfortable across the organization and at every level.

Herb Werth That’s the goal.

Dan Barnes And does this have to happen in the Big Bang Project or can this happen in phases?

Herb Werth You could always do it in phases. And that’s actually a really important point, because I think sometimes the perfect solution or what people envision as the perfect solution, is discounted by the amount of time it might take to implement that. It’s were taking a phased approach, gives you the advantage of being able to add that efficiency and reduce that risk, at least at a first step and build towards the larger goal of full, highly integrated systems.

Dan Barnes And what is specifically the role of vendors in helping firms in that process?

Herb Werth Well, vendors like to integrate, and so making it as simple as possible for the client is always our goal, but also making it supportable. And so vendors will tend to push back if something seems to deviate from a standard solution, usually because they are concerned about the supportability of that. And so I would say for customers to be mindful of that, and understand both the need to integrate the workflow that they’re trying to achieve, and then the long-term supportability of the solution. Vendors are always thinking that way. Sometimes it’s a matter of aligning the needs of the vendors that are integrating along with the client, and coming up with something that everybody’s comfortable with.

Dan Barnes So Herb, in our initial series of three videos, we’ve talked about the issuance process, we’ve talked about the way your applications can reduce operational risk for traders and portfolio managers. We’ve also talked about the importance of integration. Those videos are available on TraderTV.NET, but if somebody wants to know more information, what should they do?

Herb Werth Well, I’d encourage anyone that’s interested in more information to reach out to us. The best way to get in touch with us is to email us at:, and we’d be happy to follow up.

Dan Barnes That’s great. Herb, thank you so much.

Herb Werth Thank you, Dan.