Robert Hegarty
Traders Magazine Online News

Reinventing Trading Venues: How AI Can Help Create a More Efficient Market

In this whitepaper shared with Traders Magazine, the Hegarty Group examines how artificial intelligence and machine learning can help traders execute more efficiently.

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February 1, 1999

Order Management's BIG Room for Growth: A Fourfold Increase in Global Spending Is Predicted

By John A. Byrne

Indeed, insiders said BRASS is preparing connections to other ECNs, including consortium-owned STRIKE and Island, which is run by Datek Online Holdings in Brooklyn.

Nonetheless, people familiar with BRASS mention its rocky relationship with the Bloomberg Tradebook ECN. BRASS and Bloomberg do not have electronic links in part because of competitive fears raised by Bloomberg, these people say.

The Competition

BRASS' competitors in the order-management business are TCAM, which runs a service bureau and leases software, Trinitech, a service bureau operator, and Fidessa, which leases software.

BRASS' main challenger so far is said to be Fidessa, owned by London's Royalblue Technologies. Fidessa has two of its 30 global clients leasing software in the U.S for Nasdaq business. Trinitech, owned by Stamford-based Trinitech Systems, has 65 U.S. clients, but only services listed business. (It is rumored to be exploring the Nasdaq market.)

Fidessa, which is widely used in Europe for cross-border cash equity trading, penetrated the U.S. market with the acquisition of ATI, a Nasdaq boutique specializing in the wholesale market. Since early 1998, it has been supporting U.S. Nasdaq and listed trading at San Francisco-based Nationsbanc Montgomery Securities, and recently nabbed New York-based SG Cowen.

Meanwhile, TCAM's service-bureau approach for Nasdaq business is no match for either BRASS or Fidessa, according to industry sources. The Tower Group notes that TCAM's bureau, which serves 20 U.S. clients, has strong routing capabilities and service, but the platform is old. The vendor is a unit of TCAM Systems in New York.

Though each vendor has different methods for calculating fees, according to The Tower Group, the basic structure amounts to a monthly per-terminal charge of $1,000 in addition to $500 for connections to backoffice systems and ECNs.

Installation on a sales desk or a remote client site costs from $250 to $500, while a sliding scale fee of $1.25 down to 50 cents is charge for executions.

Based on these figures, BRASS is clearly a cash-cow machine viewed with envy by outsiders. The Tower Groups' Iati said BRASS has the benefit of being a brand name on Wall Street trading desks. "No trader ever got fired for using BRASS," he explained. "People talk about it all the time. When a new trader starts at a firm, BRASS will be the first order-management system on the tip of his tongue. It's a brand name like Kleenex [tissues.]"