APRIL 23, 2007
NEWS DESK
Credit derivatives double in 2006;
the SEC’s IT needs repairs; and
more. PAGE 3
PERSPECTIVES
GUEST COMMENT: A vast transformation of the capital markets is un-derway due to globalization, but
what we’ve seen so far
is only the first wave,
says Infosys Technologies’ Michael Ricci.
Within a few years, retail investors around the world will
gain direct access to securities markets, and this will foster the development of new classes of instruments and new ways of doing business, with Web-based technologies
being a key enabler. PAGE 4
GUEST COMMENT: Corporate Insight’s Michael Ellison says that
while online investing has grown
rapidly in its first decade, its next
spurt will be led by firms that master services such as Web-site navigation, planning tools and site
customization. PAGE 4
DEPARTMENTS
TRADING: Auerbach Grayson spin-off Axes aims for the middle tier of direct-market access in 100 countries.
PAGE 6
STANDARDS & PROTOCOLS: The
Shanghai Stock Exchange will adopt
a Chinese version of the FIX protocol in its new trading system.
PAGE 6
TECHNOLOGY: SunGard Data Systems splits its financial services business in two. PAGE 8
How Dow Jones
Now Plays in the
Algo Trading League
Data, wealth management
among priorities of Hart’s
enterprise media group
Suppliers of data and technology to the securities industry
are scrambling to meet customer
demands for more information
ever faster. Dow Jones & Co. is in
both those categories, and if Clare
Hart has any say in the matter, its
technology prowess will be more
evident as the company’s information offerings cater increasingly to the institutional marketplace’s
need for speed.
A year ago tomorrow, Dow
Jones Newswires, one of the business units now reporting to Hart
in her position as president of the
New York-based financial data
giant’s enterprise media group, introduced Dow Jones News and
Archives for Algorithmic Applications. It signaled the company’s intention to harness its news database—from the wires, Wall Street
Journal and Barron’s—for the mil-lisecond-level modeling and trading requirements of algorithmic
and quantitative traders and analysts. Further along those lines, the
company last month unveiled the
Dow Jones Elementized News
TECHNOLOGY: Instant messaging
vendor Pivot Solutions taps Louis Eccleston to be its CEO. PAGE 8
CLEARING & SETTLEMENT:
Clearstream will phase in the launch of
its Central Facility for Funds in Luxembourg. PAGE 12
DATA MANAGEMENT: Cusip Service
Bureau offers a free lookup service for
3. 6 million securities. PAGE 12
▼
People in the News
Company Index
People Index
▲
Competitiveness Move:
Japan Looks to Merge
TSE, 3 Other Markets
BY MARIA TROMBLY
Members of Japan’s Council
on Economic and Fiscal
Policy, the country’s top economic policy body headed by Prime
Minister Shinzo Abe, met last
p3 week to discuss combining four
p18 exchanges to make the country’s
p18 markets more competitive internationally.
The officials presented a plan
to merge the Tokyo Commodity
Exchange, Tokyo Financial Exchange and the Tokyo Grain Exchange into Asia’s biggest financial marketplace, the Tokyo Stock
Exchange (TSE), in a holding
Continued on page 16
On the Web
NYSEBonds goes live;
eSpeed rejects Tullett’s
buyout offer; and more.
See Breaking News at:
www.securitiesindustry.com.
www.securitiesindustry.com
Clare Hart
Feed, which at ultra-low-latency
speeds allows trading models and
programs to interpret and act upon
breaking news. The product includes an archive dating back more
than three years for back-testing
and statistical analyses.
Dow Jones is obviously not
alone in trying to serve this burgeoning trading and analytics
market. Reuters Group, for one,
has made a major release of what
it terms machine-readable news.
But Hart, who is an EVP of Dow
Jones & Co. as well as head of the
$657 million-in-revenues enterprise media group for the last 13
months, believes it offers an unmatched “spectrum of news and
information services” of which the
low-latency elementized feeds are
only a part.
Her portfolio of offerings extends to licensing of content to financial Web sites, the Dow Jones
Indexes and the widely used elec-
Continued on page 14
Accommodating Algorithms, Dark Books
Diversify Buy-Side Execution Choices
B Y JOHN HIN TZE awaits a natural match on the al-
Seeking to allow institutional in- ternative platform.
vestors to take advantage of a At the forefront of what ap-
broader variety of order flow, Pipeline pears to be a rapidly developing
Trading Systems is offering the abil- trend, New York-based Pipeline
ity to execute portions of large block is providing what it calls a
trades in the broader market using al- switching engine that chooses
gorithms while the bulk of an order the optimal algorithm to address
current market conditions and
the type of order seeking exe-
cution from among numerous
styles. Jeromee Johnson, a se-
nior analyst at Westborough,
Mass. research firm Tabb
Group, noted that leading Wall
Street firms such as Goldman
Sachs & Co. have offered “al-
gorithms of algorithms” for a
couple of years. “For the pri-
mary block alternative trading
systems [ATSs] to be able to
offer an algorithm extension is
a very logical and competitive
step,” Johnson said.
Buy-side ATS Liquidnet of
New York is also working on an
algorithmic supplement to its
traditional block-trading pool.
So is BNY ConvergEx Group,
an agency brokerage spun off by
Bank of New York Co. last year
that launched a second dark
book last week to provide yet
another option for block traders
to whittle down their orders.
Pipeline said it intends to
launch its switching engine by
the end of May. The engine “is
fed with enough shares to opti-
Continued on page 18
Turquoise Taps DTCC
And Citigroup Unit for
Processing Services
BY CHRIS KENTOURIS
Turquoise, a group of seven financial institutions developing a pan-European alternative trading system (ATS), has tapped EuroCCP, a subsidiary of the U.S. Depository Trust & Clearing Corp.
(DTCC), to provide clearing services. In turn, Citigroup Global
Transaction Services will be EuroCCP’s settlement agent.
The designation of EuroCCP,
with which DTCC established a European foothold earlier in the decade
but that had been sitting dormant
since mid-2003, followed a competitive, request-for-proposal process
as Turquoise mounts an attempt to
capitalize on opportunities opened
up by the European Commission’s
Continued on page 16
Royalblue-LatentZero Deal Speeds OMS
Consolidation and Integration With EMS
BY CHRIS KENTOURIS
Royalblue’s acquisition of La- OMS Clients, 2006
tentZero, announced last
week, will be the latest consolidation step in order management and 220
trade execution systems while blurring the historic demarcation between the two. It comes in the wake
of New York-based Investment
Technology Group’s (ITG) 2005
purchase of order management system (OMS) vendor Macgregor and
the October 2006 creation of BNY
ConvergEx, an agency brokerage,
research and technology spin-off
from Bank of New York Co. that includes the OMS of Boston’s Eze
Castle Software.
The royalblue deal—valued at
Bloomberg 275
Charles River
Eze Castle 285
LatentZero 75
Linedata 110
ITG Macgregor 125
Source:TowerGroup
up to GBP63 million ($126 million), with the first GBP38 million
to be paid up front—also allows
royalblue to merge the functionality of buy- and sell-side order management execution systems: the
well-known Fidessa, which also will
Continued on page 17
