Good things always come in threes and, for us, there were three distinct highlights at this year’s TradeTech Europe show in Paris.

The first, of course, was the launch of our very own A-Team Algorithmic Trading Directory. Despite being hidden under a proverbial bush for Day One of the show, our stash of directories was snapped up by a grateful mass of delegates and exhibitors, all anxious to gain insight into the mysterious and murky world of algorithms.

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It’s spring. It’s Paris. It must be TradeTech.

And so it is.

This year’s programme promises to add to several strands of the great electronic debate that we at A-Team have been engaged with over the past year. The conference themes mirror many of the initiatives we’ve reported in Electronic Trading and indeed many of the issues that have been keeping our subscribers, contacts and clients awake at night – when not worrying about the credit crunch.

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We’re constantly bemused by the way many in the financial markets IT community bemoan the MiFID regulation. Suppliers are sore that the directive didn’t bring the kind of Big Bang spending spree that accompanied, for example, the London Stock Exchange’s 1986 Big Bang reforms. Firms fume that they’ve been forced to spend, spend, spend merely to prove that they’re doing what they’ve in essence been doing for years: namely, providing best execution and cost transparency to their clients.

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Volatile markets, don’t you just love them? Well, that probably depends on which side of the trade(s) one sits, and on how sophisticated your IT systems are when it comes to coping with the wild intraday swings. The hedge fund ‘locusts’, high frequency traders and stat arb players, must be lapping up it by scalping intraday profits on blue-chip stocks on the Dow Jones Industrial Average, the FTSE 100 and other leading indices. Some leading stocks have seen daily percentage movements greater than over the course of the whole of 2007.

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What is the significance of the overlap between the investment banks backing Turquoise and those that have now become equity participants in Chi-X Europe? Sure, these investors have plenty of money to throw around on initiatives like these (or at least they did prior to sub-prime). But could this also be a two-way bet: an effort to ensure that the leading sell side firms back at least one winner, and notch up pressure on Europe’s incumbent exchanges?

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News late this November that TSX Group, the organisation that operates the Toronto Stock Exchange, was in talks over a potential “business combination” with the Montreal Exchange followed comments made by TSX CEO Richard Nesbitt at the Canadian Club in Montreal three days before.

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Whether Europe has yet seen the last of the new multilateral trading facilities (MTFs) springing into action is open to question, but perhaps a more burning question is how cost efficient it will actually be having to connect to a plethora of alternative venues in addition to traditional exchanges.

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Can Europe’s patchwork quilt of exchanges and upstart ATSs avoid being on the receiving end of future M&A consolidation?

While it might not have been a big deal in terms of the consideration involved or grabbed the front page of the broadsheets in Europe, Nasdaq’s move to acquire the Boston Stock Exchange’s (BSE’s) “key exchange assets” for a paltry sum of $61 million certainly has ramifications for the remaining US regional exchanges like the Philadelphia Stock Exchange.

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While the decision by Nasdaq Stock Market, the second biggest US equity exchange, to review “alternatives” to its 31 per cent stake in the London Stock Exchange (LSE) might help revive its ailing stock price, it could unwittingly have made Nasdaq itself a takeover target.

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Project Turquoise, the investment bank-backed equities trading platform being established to compete head-to-head with European stock exchanges, is unlikely to launch until Q2 2008, it seems. This news is hardly a surprise to many industry observers. As reported in the July issue of Electronic Trading, a well informed source of ours always said “all the stops would have to be pulled out” if the platform were to be up and running by November 1, when MiFID comes into force.

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Not surprisingly the UK regulator, the Financial Services Authority, is pretty preoccupied with the impact of MiFID on its activities at the moment. As chronicled in Electronic Trading’s sister title MiFID Monitor last month, it is in the throes of upgrading its market monitoring system, in conjunction with systems integrator Detica and using technology more usually associated with the algorithmic trading strategies of market participants, from vendors such as Kx Systems and Progress Apama. The FSA’s aim is to put in place a system powerful enough to track market activity – in real-time – in an environment in which liquidity is fragmented and data volumes are going through the roof, in order to effectively spot and prevent issues of market abuse.

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Welcome to this, the first issue of Electronic Trading, the new-look, newly-named, new generation of A-Team’s longstanding Transaction Networks & Technologies. We have re-launched this title with the name Electronic Trading to better and more clearly reflect the subject matter it covers – namely the deployment of technology to support all aspects of the electronic trading business across all asset classes by exchanges, alternative execution venues and buy and sell side firms globally. The name may be different, but rest assured we will continue to bring you the same high-quality mix of news, analysis and strategic insight for which Transaction Networks & Technologies is well known and valued.

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Much has been made of the threat incumbent European exchanges face from new trading venues using MiFID as a springboard to take on the established players and force down the cost of execution. However, the incumbent exchanges are not taking the challenge lying down. A key weapon in the armoury of the upstarts is execution speed. But while figures such as 10 milliseconds certainly looked market-beating a year or so ago, most of the major European exchanges have since unveiled plans themselves to radically reduce execution latency, whether by refreshing existing systems or – in the case of the London Stock Exchange – introducing an entirely new system.

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Your trusty A-Team team has just returned to their respective bases after a week long trip to Hong Kong to take part in an electronic trading conference and – more importantly for us, at least – to launch our new sibling publication, Asia Markets IT.

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The day after “the glitch” that caused delays on the New York Stock Exchange in late February, Reuters reported that Nasdaq chief executive Robert Greifeld told CNBC: “Yesterday was really not unexpected. There will be others.” Nasdaq did not suspend trading during the market rout – which came amidst a major US equities sell-off as 2.41 billion shares changed hands, causing not only delays on NYSE but also a plunge in the Dow Jones industrial average as its systems too were unable to keep up with volumes – so Greifeld was in a stronger position than NYSE chief executive John Thain, who made a defence of his systems on CNBC the same day.

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Another month, another raft of analyst research into the changing landscape for trading as MiFID and RegNMS begin to bite. Celent has focused on post-trade market dynamics under MiFID, and concluded that both trade publication and transaction reporting will come under severe price pressure, due to investment firms’ increased scrutiny of these areas. Providers will need to achieve significant scale to reduce unit costs and maintain profitability, Celent says, warning that “niche players will eventually be squeezed out”.

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When you are bogged down in the minutiae of the technological implica-tions of wholesale market change, it can be difficult to see the wood for the trees, but surely that section of market participants that is waiting for complete clarity on MiFID before beginning to prepare is seriously missing the point. Observers suggest a small but significant proportion of firms are actually banking on a delay to MiFID’s implementation, flying in the face of the consensus that while there may be a “soft” introduction in some jurisdictions in Europe, there will certainly not be an official delay.

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As readers of the sister title to Transaction Networks & Technologies – MiFID Monitor – will be well aware, all the talk about the impact MiFID will have on the structure of the marketplace is rapidly turning into action – and not before time considering the directive is due to come into force just a year from now. Market participants are certainly starting to take advantage of the opportunity MiFID presents to challenge the traditional dominance of the exchanges in Europe, evidenced by the progressing plans of the investment banks behind Project Boat to create an alternative trade reporting mechanism to rival the London Stock Exchange. And as reported in this issue, long-time MiFID evangelist Bob Fuller has found an appropriate new home at the head of Equiduct – an initiative to revive the old Easdaq system as a pan-European secondary exchange and white label MiFID solution.

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After several incarnations of sell-side alliances purporting to bring this benefit and that, both to consortium members and their dumbfounded buy-side clients, this season’s slew of announcements seems to indicate a new – yet at the same time, very old – business driver: the outrage at the cost of exchange-sourced real-time market data.

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Some months ago, our sister publication Market Data Insight interviewed Ken Marlin of Marlin & Associates. The discussion focused on the growing number of mergers and acquisitions in the generic financial markets IT space.

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