Bloomberg has continued the integration of its trading automation offering into the buy-side workflow, by launching an auto allocation capability.
“Post-trade Allocation is a critical part of trade life cycle that happens after a trade is executed but has not yet been settled, said Chris Clodius, Global Head of Buy-Side Trade Automation, Bloomberg.
The handoff between the trade and operations teams is often forgotten, but it can have financial implications if something fails or not doing in a timely manner, he said.
“We have taken the capabilities from our Rule Builder (RBLD) automated trading offering to be able to write conditional rules to automatically allocate orders post-trade for listed products in AIM, Bloomberg’s order & investment management technology solution,” he said.
While trading execution automation is crucial, the Bloomberg team has expanded its focus to allocation. This is a key part of the trading lifecycle and is especially important in markets that require fair allocation, and manual post trade allocation should not be overlooked as the industry modernizes.
Clodius said that fair allocation requirements mean that firms must show they are being fair to all underlying representative clients participating in any order.
Most asset managers will have a best execution and fair allocation policy that outline how client orders are executed and allocated, he noted.
“AIM’s allocation engine and our investment in automation helps to prevent errors and avoid costly mistakes that could affect performance of investments as a result of manual trade allocation processes.” he said.
Philippa Thompson, Head of Order Management Product for the Buy-Side, Bloomberg, added that trade allocation may still be a manual touch point for many traders, but with Bloomberg clients trading listed products can achieve zero touch trading from the portfolio manager to settlement using this rules-based tooling.
“We want to empower the client and help reduce the number of operational clicks on their tasks, particularly in a time-critical handoff point like allocation,” she said.
“We’re also offering automated order assignment to traders, meaning once a portfolio manager sends an order to the desk it can be automatically assigned to a trader by Rule Builder, as well as routed to the broker and once filled, auto allocated,” she added.
According to Thompson, the new capability helps to reduce T+1 stress: “This solution is very impactful for multi time zone trading.”
“We’ve heard from clients across EMEA to APAC who trade US equities that they often log in late at night or early in the morning to align to US settlement cycle operations,” she said.
“With automated trade allocation, this process becomes streamlined and helps remove potential human error and bottlenecks in the allocation workflow,” Thompson concluded.
