DATA MANAGEMENT

In Uncertain Environment, Merrill Lynch Bolsters Alternative Research

PAGE 8

VOLUME 21 NUMBER 7

MARCH 30, 2009

COMPLIANCE p. 4
Data disclosure vs. customer privacy

CLEARING p. 6
Hedge funds’ OTC processing burden builds

TECHNOLOGY p. 10

Newedge Americas CIO tackles integration

OPERATIONS p. 14

Despite risks, managed futures funds soar

Cutting-Edge Software Drives Interactive Brokers’ Growth

Indian online brokerage launches amid steady expansion

By Carol E. Curtis

INTERACTIVE BROKERS Group, with the launch this month of an online brokerage in India, is continuing its global expansion even as some of its competitors scale back. A strong focus on technology will be integral to the Greenwich, Conn.-based firm’s growth.

Indian clients of Interactive Brokers will have access to the 80 markets in 17 countries where its affiliates have memberships. “It has been our mission to create a global platform and provide liquidity to exchanges and brokerage services to sophisticated clients,” says IB’s founder and

CEO, Thomas Peterffy.

But is India ready to embrace online brokerage, particularly in the middle of a global downturn? “There is an emerging middle class there,” says Peterffy. “There are several places that are developing electronic exchanges. India had the most potential.”

Gerald Perez, the London-based managing director who is leading the initiative, says that IB’s leading-edge software— specifically its Trader Work Station (TWS)—is a major factor in the firm’s global appeal, perhaps more so in India. “International investors have to jump through hoops to trade in India, [and] go through a lot of regulatory speed

securitiesindustry.com
bumps,” says Perez. India has

a SourceMedia brand many “tech-savvy” investors, he says, “who have always wanted to trade internationally but needed to find credibility in the marketplace.”

Until recently, most business in India has been done via the

CONTINUEDON PAGE 16

Q_&_A

BRODSKY ADRESSES MARKET TURMOIL

As chairman of the World Federation of Exchanges, William Brodsky, CEO of the Chicago Board Options Exchange, is playing a global leadership role in tackling short-selling rules, market fragmentation and the use of circuit breakers.

FULL STORY ON PAGE 18

Uptick Rule:

Do Exchanges Have Better Alternative?

New proposal could pose fewer operational burdens

By John Hintze

AS PRESSURE BUILDS IN Washington to reinstate the uptick rule for short selling, the Securities and Exchange Commission is considering several options, including a proposal from three exchanges that could generate fewer operational difficulties than the alternatives.

The SEC in July 2007 eliminated the uptick rule, which required that short-sale bids be higher than that of the prior trade. But with many blaming short sellers for exacerbating the market’s decline there has been a call for new restrictions. The SEC plans to discuss various alternatives next week and may issue a short-selling proposal later in the month.

One possibility was unveiled on March 16, when Sens. Johnny

CONTINUEDON PAGE 15

How AllianceBernstein Built a Better Trading Platform

By Katherine Heires
WHILE OTHERS DEBATE THE
relative merits of order
management systems
and execution manage-
ment systems, Michael
Schwartz, COO of global trading
at investment manager Alliance-
Bernstein, created a hybrid to get
the best features of both.

Schwartz wanted to meld the data management, reporting and compliance capabilities of an order management system (OMS)

with the speed and broader connectivity typically associated with an execution management system (EMS). The goal, he says, was to build a sin-

ONTHEWEB securitiesindustry.com

Geithner Wants Mandated Clearing and Reporting of OTC Derivatives

CASE STUDY

gle, streamlined system for long-only equities traders at AllianceBernstein, a New York-based firm that offers about 80 mutual funds and has almost $400 billion in assets under management.