An investment portal is a web-site that is dedicated to providing tradable investment opportunities. Investment portals either offer investment options from a single source, e.g. investment options just from a single financial institution or bank group, or from several different providers. The basic flows in automated trading are shown below.
Source: My Treasury
There are two types of trading offered by investment portals: omnibus trading and full disclosure trading.
In omnibus trading the portal client opens an account with the portal who then trades on the client's behalf. These trades are mostly made in the name of the portal provider and the name is not disclosed to the money market fund or investment fund, although increasingly the omnibus trading portals are being forced to provide the names of their clients. The main advantage of the omnibus trading is the ease of trading with many different funds.
Full Disclosure Trading
The other type of trading is full disclosure in which the portal user has a full business relationship and contact with the bank or fund manager rather than just the portal provider. The main advantage of full disclosure trading is the full transparency of the parties in a fund.
Portal Variations and Types
The main variations in the investment portals include:
- whether the portal is open to many funds or tied to particular bank or money market fund
- whether the portal targeted at European or US market
- trading model used - full disclosure with direct contact between corporate and fund/bank or omnibus trading
- the number of funds covered by the portal
- whether rebates are offered and how are they handled
- the level of data and analysis provided on fund performance
- the message formats and connectivity channels between the portal their corporate clients and the available funds
- the level of straight through processing and integration provided to both the corporate treasury systems and the funds' internal systems
- the overall level of fees charged to the corporate client and to the funds
- provision of market monitoring functionality and data
- integration with paying agents
- cut-off and timings for investment
- ease and speed completing an investment and receiving trade confirmation
- the audit trail data kept on each trade.