By James Hartley, Vice President, Research, A-Team Group

A quick look into the activities of the FIX community, and the algorithmic trading products that refer to the specification, reveals some very interesting trends that will affect its future – and yours

The FIX protocol has generally been accepted as the de facto “standard” for electronic trading. Yes, there are other such protocols that can be used for a variety of specific instrument classes – many of them proprietary and some of them “open”. Yes, there are other messaging standards that complement, extend or even enable some of the same conversations that FIX conveys. And sure, FIX isn’t completely pervasive in the industry – yet. But no other effort within the financial services community has the momentum and general backing of such a large block of players. New participants are joining or existing members are increasing their FIX involvement, thus new FIX activities are commencing – and more importantly completing – with some frequency.

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By Maryann Houglet, Senior Vice President, Strategic Consulting, A-Team Group

There is no question that “bottom up” has gone “top down” when it comes to next generation reference data management. But is the support there?

As the industry addresses and resolves tactical data management issues with central data solutions, firms will leverage reference data into strategic business decisions – enterprise wide. Senior managers will look to data management solutions for top down, enterprise views of exposure and risk, as well as to provide scalability for future business needs.

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By Stéphane Leroy, Head of Global Sales & Marketing at Quant House

The financial community must make a successful transition from screen-based to program-based trading

There has been an ongoing revolution in trading since the first exchanges went fully electronic back in the 1990s. At that time, screenbased trading applications began to be created to meet the needs of users regarding reliability, speed and volumes. Those applications rapidly covered a wide scope of work in order to enhance day to day tasks related to market data processing, market research, risk management, order management and clearing and settlement.

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By Andrew Delaney

In an exclusive interview with A-Team IQ in April – just days before news of the Thomson-Reuters deal emerged – Reuters CEO Tom Glocer shared his views on his achievements at Reuters so far, and his plans for “Phase 3” – to make Reuters great again

Prologue
The CEO stepped out of the limousine and climbed the grey steps that led to the revolving doors into the run-of-the-mill glass and steel high-rise. Ushered through the lobby to the elevators, he rode to the allocated floor, where he was escorted along a sombre corridor to the teak double-doors of the board room.

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By Pete Harris, President, Americas and Editor-at-Large at A-Team Group

A-Team has been tracking the diverse collection of technology innovators playing in the low latency space. So where is low latency IT going?

I was recently asked for a definition of low latency, and as I struggled to articulate a concise answer, I realised that it’s a term that means different things to different people. The best I could offer is that it means delivering data or conducting a transaction in as near to zero time as possible.

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By Thea George, Editorial Director, A-Team Group

Order routing system provider TORC Software has used technology from ACTIV to address its latency and throughput challenges

TORC Software operates TradeSpeed, an equity, options and futures order routing system connecting users to various exchanges and routing orders across multiple asset classes. Rob Newhouse, its chief technology officer, says when he came on board some three years ago, TORC’s technology platform was constrained in its ability to deliver quotes in a non-latent fashion.

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By Henry Young, Director at TS-Associates plc

If you are serious about low latency, it is worth trying to look beyond the hype

An introduction to the industry’s latest bandwagon is barely necessary. As an eternal cynic, I loathe seeing technology inappropriately sold. So among all the verbiage promoting low latency concepts and solutions, I feel the need to contribute some balance to the debate, and make some observations – a reality check.

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By David Litner, Senior Vice President, Engineering at NYSE Transacttools

What should exchanges be doing to facilitate the low latency demands of the marketplace?

The war to achieve low latency trading is one waged on many fronts. Losing any of the battles means defeat. The critical fronts are well known – the networks, the market data feeds, the trading applications and exchange adapters. In the past, the exchange could be thought of as the battlefield, the common element among combatants. Now that an exchange in essence means, an exchange, or an alternative trading system, or a multilateral trading facility, or a dark pool, the exchange industry battlefield is a new variable.

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By Scott Parsons, Chief Scientist at Exegy, Inc.

Processing latency has traditionally dwarfed other sources of latency in a trading system. But there could be a solution

Latency defines how quickly a system can react to changing conditions. In any system of networked computers, overall latency can be broken down into three fundamental categories: propagation latency, transmission latency and processing latency. Other forms of latency, such as queuing or network latency, can be described in terms of these fundamental types. Understanding the relative magnitudes of latency in each category can yield valuable insight for optimising the performance of a high-frequency trading system.

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By Thea George, Editorial Director, A-Team Group

A truly successful data project will not only address the technology challenge, but also the business process re-engineering required, reckons enterprise data management veteran John Fleming

The appointment of chief data officers (CDOs) has been heralded as a sign that financial institutions’ senior managers have at last recognised the importance of enterprise data management. While this is undoubtedly true, taking the EDM remit and running with it through to a successful conclusion is no mean feat. Enterprise data projects risk being derailed at a number of turns, and those charged with spearheading them must balance the often conflicting needs of different stakeholders, while demonstrating a solid ROI and equipping the firm with the appropriate resources – both human and technology – for the job.

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By Thea George, Editorial Director, A-Team Group

The growth in demand for evaluated prices for illiquid and complex securities is not in question. But how impressed are the buyers of such prices with the third party services on offer today, and how are the providers working to stay ahead in an increasingly competitive market?

Demand for evaluated prices for illiquid fixed income securities, derivatives and structured products is reaching new heights. Increasing investment in thinly-traded bonds and derivatives has created a growing requirement among investment banks, funds and fund administrators for accurate and timely evaluated prices for portfolio valuation purposes.

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By Andrew Delaney, Editor, A-Team Insight Quarterly, A-Team Group

It’s a fascinating coincidence that two apparently similar regulatory regimes will come into force on either side of the Atlantic just weeks apart. The similarities between them – of purpose? implication? upheaval? cost? – are such that many market practitioners have confused key elements of Regulation NMS in the US and the EU’s Markets in Financial Instruments Directive, more commonly known as MiFID.

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By Andrew Delaney, Editor, A-Team Insight Quarterly, and Sharon Wilbraham, Contributing Editor, A-Team Group

If you’re heading to Boston for Swift’s Sibos conference this October, you’ll need the A-Team guide to the city, its key business players and of course the show itself

You know the drill. Your family hates you because you’re going to be away for a week in some exotic locale. Touring the sites. Savouring the cuisine. And, in their minds at least, getting up to all kinds of no good (ie, having fun).

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The challenges of managing reference data across the enterprise are well documented (not least by A-Team through its various research projects and Reference Data Review newsletter!), but the dramatic growth in the use of OTC derivatives is stirring up data management strategies. So much so, that 73 per cent of senior data managers interviewed by A-Team Group in a recent survey commissioned by enterprise data management specialist GoldenSource said that OTC derivatives are causing them to reevaluate their existing data processes (see chart 2).

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A series of informal audience polls during the FIX Protocol Limited Trading Summit in Singapore in May yielded some interesting observations on the state of play with electronic trading in the Asian region, as well as some valuable insights into how Asia e-trading will develop in the coming years.

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It can be expensive and time-consuming to evaluate new trading and market data technologies: there are more middleware and ticker plant providers than ever before, at least eight market data systems, several credible high performance messaging systems and a range of options on the execution side. As Peter Lankford, president of Technology Business Development Corporation (tbdCorp), says: “The good news is that there are a lot of new ways to accelerate things. The bad news is that there are a lot of new ways to accelerate things.” The Securities Technology Analysis Center (STAC) founded by tbdCorp late last year is seeking to reduce the barriers to technology evaluation with a toolset and methodology for measurement. The results of some of it activities can be seen in the charts on these pages. STAC is also working with customers and vendors to develop benchmark standards – application level benchmark specifications for market data, complex event processing and other domains. Watch this space.

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By Angela Wilbraham, Chief Executive Officer, A-Team Group

Launching this fine magazine (which we hope you’re enjoying); diving into the online world of portals, blogs and podcasts; jet-setting around Asia supporting the launch of a new Asia Markets IT newsletter; juggling all manner of client deadlines ahead of the crucial SIFMA Show; (oh, and dealing with the usual administrative nonsense associated with running your own company). It’s keeping us more than busy here at A-Team HQ. But we have a feeling this mirrors what is becoming an astounding level of activity in our industry in general – everyone is just so under the gun it seems.

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