www.securitiesindustry.com
SEPTEMBER 15, 2008
NEWS DESK
Nasdaq OMX to supply post-trading services to Bond Exchange of
South Africa’s derivatives market;
Northern Trust upgrades fixed-income performance attribution tool.
PAGE 3
PERSPECTIVES
GUEST COMMENT: As the cost of
maintaining market data systems
skyrockets, many firms are taking
a second look at their data requirements and the available solutions,
writes Interactive Data Corp.’s Don
Finucane. PAGE 4
DEPARTMENTS
DATA MANAGEMENT: The London
Stock Exchange will begin issuing
Sedol identification codes for listed
derivatives. LSE’s Mark
Husler says that “in
shifting the production
of Sedol codes to the
UnaVista platform, we
will be doubling the database size over
the next 18 months.” PAGE 6
Could Greater
Disclosure Breath
New Life Into
Mortgage-Backed
Securities Market?
BYSHANEKITE
In an effort to resuscitate the residential mortgage-backed securities (RMBS) market, the American
Securitization Forum (ASF) is working on disclosure and reporting
packages that could bring institutional investors back to the sector.
In July, the ASF introduced Project Restart, an industry-supported
initiative that seeks to restore investor
confidence by ramping up disclosure
through standardized data fields. By
providing additional information, the
Continued on page 17
Sunil Hirani
Now Part of ICE, Creditex Sees
Bright Future in OTC Derivatives
DATA MANAGEMENT: The Financial
Information Forum is surveying
members on their readiness for a
new nomenclature for listed options, and seeking comments on
potential solutions. PAGE 6
BY MAUREEN NEVIN DUFFY referencing several widely traded
Within days of its acquisition North American telecommunica-by IntercontinentalEx- tions companies. Fifteen European
change (ICE), Creditex Group had dealers took part in a Sept. 4 com-good news for regulators and cred- pression of contracts based on Eu-it derivative market participants: It ropean telecoms.
completed its first portfolio com- The platform uses compression
pressions of single-name credit de- to replace existing trades with a
fault swaps (CDS) on a platform it much smaller number of transac-manages jointly with Markit Group. tions, which the companies say re-
STANDARDS&PROTOCOLS: In moves
that could have an impact on ISO
20022 adoption, the Object Management Group has signed an
agreement with FIX Protocol Ltd.
and formed a consortium to evaluate the model-driven message in-teroperability standard. PAGE 8
Tom Deutsch
Creditex, an interdealer broker- duces operational risk while leaving
age and provider of credit deriva- market risk profiles unchanged. The
tive processing services, and Mark- U.S. dealers saw a 56 percent gross
it, which supplies data and valua- notional reduction of compressible
tions services for over-the-counter contracts and a 49 percent gross no-derivatives, said last week that 14 tional reduction across all partici-U.S. dealers on Aug. 27 participat- pating counterparties. The Euro-ed in compression of CDS contracts Continued on page 14
Admitting Credit
Suisse Algos, Aqua
Opens Liquidity
Cantor-backed ATS
is moving beyond
regionals, institutions
BYJOHNHINTZE
Aqua Equities, a dark book
backed by Cantor Fitzgerald and affiliate BGC Partners,
is opening up its liquidity. Following a month-long trial run,
Credit Suisse last week began
officially sending algorithmic
orders to Aqua—the first bulge-bracket firm permitted to do
so—allowing them to interact
with the venue’s block orders
from regional brokers and institutional investors.
“With Aqua, we can interact
with Aqua’s block liquidity
while simultaneously working
them in the rest of the market,”
explained Dmitri Galinov, head
of liquidity strategy at Credit
Suisse’s Advanced Execution
Services (AES).
Like alternative trading systems (ATS) operated by Investment Technology Group, Liquidnet and Pipeline Trading,
Continued on page 17
Are Firms Ready for Twitter?
Playing catch-up with community-creating technology
Twitter screens. Some Twitter
posters develop armies of followers.
Early adopters, as with most
other social media platforms, were ing, one click makes them vanish
primarily teenage girls and the tech- from your screen.
nology obsessed. But usage has Twitter users often link to news
spread quickly in recent months— items or blog entries, discuss issues of
the platform regularly grinds to a mutual interest, spread gossip and pro-halt due to heavy traffic—and Twit- vide coverage of events in real time.
ter, with its powerful community- For Howard Lindzon, partner at
p3 creation mechanism, is becoming Toronto-based hedge fund Knight’s
p18 widespread among groups such as Bridge Capital Partners, Twitter is
p18 venture capitalists, journalists and both a useful research tool and a way
stock traders. to share information with a closed net-
Because members select the peo- work of friends. “I’ve been using Twit-
ple they want to follow, Twitter ter for about six or seven months,” he
communities are self-organizing. says, adding, “some friends of mine
Twitterers can see who the users had invested in it, so I was shown it
they are following are subscribed early in the cycle.”
to and follow them as well. If a par- A major attraction of Twitter is
ticular user is particularly annoy- Continued on page 16
TRADING: Traditional asset managers are rapidly adopting execution management systems, says
Aite Group. PAGE 8
TECHNOLOGY: Stream Base Systems
and Oracle propose new development model for event processing;
Aleri releases results of performance test; Progress Software signs
Chinese investment bank. PAGE 12
TRADING: Thomson Reuters and
BNY ConvergEx Group announce
strategic alliance. PAGE 16
People in the News
Company Index
People Index
On the Web
DTCC, Euroclear launching
syndicated loan services; NYSE
Euronext introduces Octopus
See Breaking News at:
www.securitiesindustry.com.
BYMARIATROMBLY
New channels of electronic
communication have been a
boon to many industries, opening
up sales and marketing opportunities, helping improve customer service and speeding up innovation and
collaboration. For Wall Street, however, the benefits of technology such
as Twitter have to be weighed
against the compliance pains.
Twitter, launched by San Francisco-based Obvious in late 2006 before being spun off, is a cross between an online discussion board
and instant messaging system, allowing people to post short updates—capped at 140 characters—
on their activities. Users can subscribe to each other’s updates, or
tweets, and have them sent to their
