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TABB Forum: For True TCA, Buy Siders Must Pierce the Cloak of Secrecy Around Tech Fees

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Sam Belden

Sam Belden

By Sean Sullivan, LiquidityBook

Legacy. It’s a word we often use to describe systems and applications that have been in place for a long time. Too long, in many cases. These systems were great back in their day, which is how they became so deeply woven into operations. But when they don’t keep up with the pace of change, they’re usually headed for replacement.

It’s less common to hear “legacy” used to describe a business model. That’s because when they get outdated, market forces naturally pull business models into line with the current market. If they don’t change, business models get disrupted by products and services that are faster, better and cheaper than the old alternatives.

But this isn’t always the case, as evidenced by what’s currently going on in the order management system (OMS) market today.

Legacy OMS vendors have managed to keep their business models and pricing structures in place for years. The reason is that OMS deployments are among the most ingrained systems inside most fund managers’ operations. They touch almost every department in the organization, from trading and compliance through the middle office to clearing and settlement. Changing out an OMS system requires a great deal of work and involves substantial risks, so the case for doing so must be incredibly compelling.

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