Front office support can be a grind, especially when it doesn’t allow time for anything else. During volatile market conditions, PMs may need to rebalance or unload positions quickly and having orders “stuck” in compliance means your team is constantly taking calls.
Here are 5 tips to free up your team:
- “Catch-all” Rules: Rule libraries are often built during the initial stages of an implementation, when the details of how specific instruments will be traded may be undecided. To ensure everything is caught, a rule may be written very broadly, e.g. “no derivatives,” when the actual requirement is “no derivatives unless they are hedging a position.” Making rules more precise will allow important trades to be executed quickly and eliminate the excess noise that often leads to errors.
- Missing Data: We all know that missing data produces erroneous results. Taking the time to finally get that supplemental data sourced, tested and implemented will help eliminate the need for overrides.
- Speaking of Overrides… Having too many overrides looks bad during an audit. If a PM or investment team is constantly asking for overrides, take the time to analyze those orders, rules and violations to determine whether those rules are really written correctly.
- Warning Levels: Do your PMs really want to see warnings when they are close to a limit? Some may want to keep them, but PMs who are modeling or making firm-wide allocations may be frustrated by the unnecessary pop-ups. Meeting with PMs to help tailor rules to their strategies will keep them self-sufficient.
- “Guard-rail” Rules: OMS compliance systems can be used to check for conditions not related to compliance, e.g. throwing a violation if the person creating an order doesn’t fill out a field that is used for reporting. Just because compliance rules can be used to check for those things doesn’t mean they should, especially if your team is responsible for clearing those warnings and breaches. Instead, consider meeting with the OMS support team or vendor and exploring other ways the system can support the necessary workflows without leveraging the compliance engine, e.g. making an order reason field (“hedge” vs “speculation”) mandatory to complete an order, rather than creating a violation if it is blank.
Carving out the time to address these types of issues may be challenging, but getting the time back every day for the foreseeable future will make your team’s jobs a lot more satisfying.