www.securitiesindustry.com
A More Electronic Future for NYSE Hybrid
Exchange pilot-testing reserve orders, hires execution talent
BYJOHNHINTZE the Nasdaq division of Jersey City,
The New York Stock Exchange N.J.-based Knight Capital Group.
is pilot-testing electronic NYSE and UBS declined to
PERSPECTIVES entry of reserve orders, moving its comment on the move.
GUEST COMMENT: Business leaders Hybrid Market one step closer to Mecane’s experience at retail-ex-
pushing their firms to unite dis- its fully electronic rivals at the ex- ecution-oriented firms such as BYCHRISKENTOURIS
parate IT teams to benefit from pense of its trading floor. It has also Schwab and Knight prompted peculation about a possible
shared solutions face many obsta-
cles, says Tideway Systems’ Charles hired an execution and market sources to suggest that NYSE may Smerger of LCH.Clearnet
Rattray: “Return on investment is structure expert away from UBS. be bolstering its efforts to attract re- and the Depository Trust &
difficult to justify prior to the ex- Joseph Mecane, managing di- tail order flow. Today, that flow is Clearing Corp. (DTCC), cre-
penditure and the net benefit even rector at UBS, will on May 21 start largely directed toward the all-elec- ating a transatlantic clearing-
harder to articulate.” PAGE 4 at NYSE, working under Larry tronic exchanges and electronic house, has stirred debate about
SPECIAL REPORT Leibowitz, EVP of U.S. markets communications networks (ECNs). Joseph Mecane whether consolidation or inter-
The syndicated loan industry is tak- and global technology, who in July However, Mecane’s market operability is the best means for
ing strides toward automation with left the COO position at UBS structure expertise could be his ber 2007, down from 55 percent a improvingoperationalefficien-
a set of standardized
messaging formats and Americas Equities. Mecane and biggest asset to NYSE. The ex- year earlier and 70 percent in 2005, cy and reducing processing
a communications net- Leibowitz also worked together at change’s Hybrid Market, which according to New York-based Tabb costs for European securities
work from the Depos- Schwab Capital Markets, which was seeks to integrate its floor brokers Group. For the last few months it transactions.
itory Trust & Clearing purchased by UBS in November and specialists with the electronic has been close to 25 percent. DTCC officials in New York
Corp. The recent drying up of liq-
uidity in the primary loan market 2004. Previously, Mecane, who markets, has steadily lost market NYSE’s floor brokers and spe- declined to comment on an April
“has made our work even more im- held the COO title at Schwab Cap- share. The NYSE floor’s listed-share cialists have dwindled in the past 29 article in the Financial Times
portant than it was before,”Tsaihd eitalM, wasachisef o tpe eratringKoffieceryfor volume was 27 percent in Decem- Continued on page 22 that cited unnamed sources in
Trade Settlement’s Pat Loret de reporting that the market-owned
Mola. “People want smooth execution, they want timely execution of tAoucStuiocncReastes utility has, over the last nine
trades.” Also in this report: Opera- months, been in talks to take
tional efficiency is taking on greater
importance in the fund of hedge Securities Task Visit Booth 401 over LCH.Clearnet. Rumors
funds industry; and HSBC’s Daniel
Doscas on the evolution of straight- Force Targeting to learn how you can unlock your firm’s paboutteanptoisasiblle tie-up first sur-
faced last fall when the bank-
through processing. PAGE 11
DEPARTMENTS Broker-Dealers SIFMA Operations Conference backed Turquoise trading plat-
May 4 – 7, 2008 form selected DTCC’s resurrected European clearinghouse,
TRADING: Though the proliferation
of trading platforms is bringing BYCAROLE. CURTIS EuroCCP, for central counter-
fragmentation to the European
markets, executives at several venues A task force of state securities party services.
regulators is sending broker- LCH.Clearnet did not rule
foresee a wave of consolidation over dealers subpoenas and information out the possibility of a combi-
the next two years. PAGE6 requests as it examines their con- nation. “ LCH.Clearnet speaks
TECHNOLOGY: Seeking to increase duct in the frozen auction rate se- to other parts of the post-trade
its presence in the low-latency curities (ARS) market. Coordinat- A portfolio summary dashboard from JP Morgan’s Deal Vault platform infrastructure all the time and it
trading arena, IBM has acquired ing the effort is the North Ameri- is in everyone’s interest that
data feed technology provider
©2008 Broadridge Financial Solutions, Inc. Broadridge ancdatnhe BSroeacdu ridrgi etloie gosarAe tdramdemin arkisst or f Bart oo adridsgeAFsin-ancialJSoPlutionMs, Inc.organ Platform Helps Private
Info Dyne. Continued on page 20
PAGE 6
sociation (NASAA), whose presi- STANDARDS & PROTOCOLS: The dent, Karen Tyler, says that she Equity Move Beyond Spreadsheets
Russian Trading System looks to doubts the market will ever func- BYCHRISKENTOURIS “DealVault is the industrial-
build foreign order flow with FIX connectivity. tion again. If violations are uncovered, the A new front-end platform from strength tool the private equity in- PAGE 8 JP Morgan Chase & Co.’s vestment industry has been waiting
▼ state probe could lead to sanctions private equity fund administration for, particularly given the valuation
People in the News p3 and other penalties, including arm is drawing attention to the concerns in today’s volatile mar-
Company Index p22 rescission—allowing investors to growing technology demands in a ket,” asserted James Hutter, global
People Index p22 ▲ recover their investment plus in- sector where outsourcing is still rel- head of JP Morgan’s private equi- terest—according to Tyler, who is atively young. ty fund services unit in New York.
also the North Dakota securities JP Morgan’s Web-based Deal- “Rather than relying on Excel
On the Web commissioner. Vault system, launched last month, spreadsheets, private equity man-
The turmoil in the $330 billion centralizes deal-tracking, allowing agers can automatically input in-
Wall Street Systems buys Aleri
banking business; Omgeo gets ARS market has spurred a series of private equity managers to store fi- formation from around the world
approval for TradeSuite e-con- investigations by Massachusetts se- nancial data on the companies in in a single application.”
firms. See Breaking News at: curities regulators, the Financial which they invest. Funds can use the Portfolio valuations made using
www.securitiesindustry.com. Industry Regulatory Authority information to aggregate perfor- DealVault can be fed automatical
PAGE 3
Would Transatlantic
Clearinghouse Bring
New Efficiencies?
Potential combination
of LCH.Clearnet, DTCC
could offer cost savings
