UNMADE BY MADOFF

Two programmers charged with helping to cover up fraud. PAGE 6

HOW WALL STREET OPERATES

Volume 21 Number 21 • November 16, 2009

UPTICK p. 4

Bloomberg Opens Up

NEWS DESK p. 7 Crackdown on Clearing

CASE STUDY p. 20

FBR: Prime Time for ‘Mid-Prime’

LAST WORD p. 22

Putting Clothes on Naked Access

Adaptability,
Speed Keys On
World’s Largest
Trading Floor

SPECIAL REPORT

Taming the Deluge
Of Market Data
Paper Plain:
Default Pacts
Resisting
Electronics

By Alexa Jaworski AS OPERATORS OF THE world’s largest trading ;oor, technology executives at UBS are frequently asked how often the bank upgrades its trading systems.

Q&A

With UBS’ Susi, Self

As venues
multiply and trading
fragments, ITG turns to
complex event processing
software to create a
consolidated quote stream
in Europe.

FULL STORY ON PAGE 10

“The answer is: constantly,” said Charlie Susi, head of direct execution in the Americas and global head of electronic trading product management at UBS. “We are always adapting. We are always monitoring our trading performance. We use our algorithms for our own internal and full service desks, as well as delivering them to clients, so we’re actually able to have a great internal test base for them.”

Trading at the 103,000- square-foot trading ;oor in Stamford, Conn. is conducted

ByChrisKentouris

ABOUT $10 BILLION OF

Treasury bonds weren’t de- CONTINUED ON PAGE 8

$10 Billion Question: What to Do Since Failing is Still An Option in U.S. Treasury Market

By Shane Kite

DEALER OPPOSITION, TRAD-ER ambivalence and regulatory uncertainty are keeping credit default swaps (CDS) from trading electronically in the U.S., according to top executives at platforms which allow screen-based execution of such contracts.

Dealers prefer setting prices by phone, instead of computer, to keep spreads wider— and their fees higher. This, even though, BGC Partners, GFI Group, MarketAxess, Tradeweb and Icap, among others, o;er electronic trading in swaps over technologies they’ve created to facilitate buying and selling of derivative securities.

The International Swaps and Derivatives Association (ISDA) also has standardized corporate swap contract terms for elec-

CONTINUED ON PAGE 18

securitiesindustry.com • A SourceMedia brand

livered by their sellers to the buyers of the securities—in the second week of October.

That ;gure, released by the Federal Reserve Bank of New York, represents less than ;ve percent of the $416 billion in total value of Treasuries traded for that week by 18 primary dealers which report their activity to the New York Fed.

This is a far cry from the cumulative $2.6 trillion in

failed transactions for the week ended Oct. 15, 2008. But operational glitches still plague the market, with mismatches of information obstructing some transactions and lack of deliveries of securities from lenders or other parties obstructing others. Short sellers also, in some cases, simply decide that the cost of delivering outweighs the pro;t.