www.securitiesindustry.com
JUNE 18, 2007 Citadel Jumps Into Early Reports In on Penny Options; Reviews Are Mixed
NEWS DESK Personnel moves in enterprise data A New Fray: Hedge NYSE Arca is the most Pilot Data: Change in NBBO Quoted Spread Width
management; Belzberg, trading and Fund Administration positive about results,
chess; and more. PAGE 3
P BY KATHERINE HEIRES advocates extension
ERSPECTIVES T he crowded field of hedge BYJOHNHINTZE
GUEST COMMENTS: For Sarbanes-
Oxley, Patriot Act and other concur- fund administrators and tech-
rent compliance challenges, master nology servicers has a new com- In reports to the Securities and
Exchange Commission on the
data management may hold a solu- petitor to contend with—one with pilot of penny-increment pricing
tion, says Siperian’s Joe DosSantos. a strong industry pedigree, opera- that began in January, the estab-
PAGE 4
Trading Services . Contteio nnta&l eDxpaetartiSseeravnidcedsee.pEpxocchkaet nsgeliSsheerdviocpetsion. sPeoxrcthfaonlgioes&geRnie srkaSl-
SPECIAL REPORT that many others lack. ly recommend proceeding cau-ervic es
Several years of financial market re- The new entrant is Chicago- tiously while relative newcomer
covery and growth have changed the based Citadel Investment Group, NYSE Arca Options favors full
supply-demand dynamic for infor-
mation technology professionals. which, with $13.5 billion of assets speed ahead.
Across the corporate world, and par- under management, is a top- 20 “We will be submitting a filing
ticularly in finance, it’s a seller’s mar- hedge fund, a multistrategy pow- in the next weeks detailing what we
Source: NYSE Arca Options
IT Hiring Plans ket for tech talent, erhouse founded by the increas- recommend for the penny pilot—
17% and firms are looking ingly high-profile fund manager yes, it will be asking for an exten-
for ways beyond
money to attract and Kenneth Griffin. Also differentiat- sion of the 13 names as well as an
2% retain it. Also in this ing Citadel from its many secretive expansion [to other options class-
Increase Decrease report: a preview of peers has been its trade execution es],” said Jon Werts, VP of deriva-
the rebranded Sifma technology con- and market-making business. tive products at the NYSE Arca
ference and its hot topics, including
international e-trading developments, Fronting that aspect of the firm’s unit of NYSE Euronext. “All our
liquidity management and compli- diversification is Citadel Execution data and research show the penny
ance systems. PAGE 17 Services president Matthew An- pilot has been a success across the
DEPARTMENTS dresen, who will be addressing the
CLEARING&SETTLEMENT: A cooper- opening session of the Securities ation agreement between DTCC and Industry & Financial Markets As- Equity, Option ATS Planned
China Securities Depository & Clear- sociation’s annual Technology BYJOHNHINTZE
ing CorMp. couuldlb teia-pBrecruorsokr teo orp- erational linkages supporting cross- Muanlatge im -Aenst sCeontfereMnce uinlNtie-wRouteeteranMeleuctrlotnic-Rtraedingieoxencutive David Mor- border transactions. PAGE 8 York on Tuesday. V timer is leading a new venture, 3D Markets,
Citadel Solutions, as the ad- that is planning to introduce some new wrinkles into
TECHNOLOGY: With “PC-over-IP” ministration offshoot is called, of- the alternative trading system (ATS) market, in-
technology coming out of stealth mode, ficially opened for business in the cluding a platform specifically for options traders.
ClearCuVbeisanidtouthesrsaarte ttouhtieng Sa breakthrough in the distances for con- IAfirTsteqcuahrtnero, bluot gonyly SonhJoulwy 1 will The New Hope, Pa. company, which is three
necting bBlaodeoPtChne3tw0or0ks5. APmAGEe11ricaitsbHegainlls,er2vnindgFolutside clients, says months old and funded by executives in the e-trad-president John Buckley. At that ing field, has a team of four software developers, and
CLEARING & SETTLEMENT: Seeking new revwenwuewan.dtoeyweingsecrnosds-abnoradleyr ticsp.ocionmt it wCiollnhtaavcetiStsasliegsh:t2s 1o2n.6t7h9e.9M00o0rtimer anticipates getting additional funding and
opportuCni hti iecsa,gBoelz . bNeregw TYeochrkno.loLgoiensd’on .leBaodsitnogn h. eSdaglteLf aukn edCiatydministration adding sales and marketing staff as the firm moves
EBS embarks on self-clearing strategy. names, including businesses owned closer to its two launch targets: a late-summer pilot
PAGE 12 by HSBC and State Street Corp.; of an equity ATS called Halo, and testing of the op-
Continued on page 44 Continued on page 42
board,” he said.
Werts declined to provide more
detail about NYSE Arca’s prospec-
tive filing, which is still being
drafted. That optimistic tone,
however, goes along with that ex-
change’s supportive and aggressive
posture with regard to penny pric-
ing and the options business over-
all. NYSE Arca and the Boston
Options Exchange (BOX), the
smallest of the six U.S. options ex-
changes in volume, use price-time
priority models to fill orders,
where whoever sets the price is
Continued on page 45
TECHNOLOGY: As technology and
competition advance in complex event
processing, StreamBase offers enhancements including an algorithmic
trading framework. PAGE 14
New Terminal From CBOE
BY JEFFREY KUTLER
Amid a flurry of technology developments sweeping through options markets, the Chicago Board
Options Exchange (CBOE) is weighing in with a new
Hybrid Trading System (Hy TS) terminal.
Being announced today after several months of
testing, Hy TS was developed by the Nexa Technologies subsidiary of Penson Worldwide, the Dal-las-based execution, clearing and technology company that has a long-standing presence in options
markets. It is a new generation of a terminal introduced four years ago and still marketed by CBOE
and Belzberg Technologies of Toronto, and is in
Continued on page 46
TRADING:EdgeTrade introduces a dark-pool-only algorithm. PAGE 39
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On the Web
Top Brokerages Are Ready to Be Rated
TheMarkets.com’s MeritMark nears launch, Thomson enters
BY KATHERINE HEIRES ternal Broker Review (IBR), an online service for the
The spotlight on sell-side research will shine a bit buy side that compiles and collates internal feedback,
p5 brighter in late June when 12 leading commentary and voting on the services re-
p46 investment banks officially roll out a Web- ceived from brokerage and research firms.
p46 based platform to facilitate the assessing The Web-based program follows the ap-and rating of sell-side analyst performance. proach of the annual Pan-European Extel
MeritMark, as the platform is called, Survey that dates back to 1974. IBR is now
will be launched with, and be available available on the Extel Web site and is sched-over, TheMarkets.com, where votes can uled to launch on the Thomson One plat-be registered starting at the end of this form in late 2007, Thomson Financial said.
month, according to officials. David Eisner The MeritMark sponsoring firms are
The consortium has company: Thomson Financial Banc of America Securities, Bear Stearns & Co., Cit-last week announced the Thomson Extel Surveys’ In- Continued on page 40
Apama and Dow Jones in algo
alliance; SS&C going public;
and more. See Breaking News
at: www.securitiesindustry.com.
