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August 31, 2000

Polishing BRASS: SunGard Trading Systems has a grand scheme to tie together the buyside and the s

By Peter Chapman

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The house that BRASS built is being remodeled. BRASS is not called Automated Securities Clearance (ASC) anymore and it's not just about managing Nasdaq orders. It's now a linchpin in a grand scheme to electronically connect traders everywhere.

The vendor of the BRASS order management system that dominates Nasdaq trading rooms is now called SunGard Trading Systems (STS). It's a division of Wayne, Pa.'s SunGard, a billion-dollar financial technology conglomerate that is battling about a dozen other firms for the right to wire Wall Street.

At the helm of Weehawken, N.J.-based STS is Tom King, a former top salesman at ASC. King took the post a year ago after the then president Bob Greifeld was moved upstairs. Greifeld is now one of five senior vice presidents at Sungard who report to president Cristobal Conde and chief executive James Mann. Greifeld's responsibilities include STS.

SunGard's strategy became clear in February when it introduced the SunGard Transaction Network (STN). The new routing mechanism will tie together the buyside, the sellside, and various execution points and clearing and settlement departments.

Trade Automation

The goal is to satisfy Wall Street's need for straight through processing, or the total automation of the trade cycle. On the trading end, STN processes orders, indications of interest, confirmations and allocations.

"We are in a unique position to tie everything together," Greifeld said. "STN will be the pipeline to connect buyers and sellers."

Analysts say STN is a smart move. "It's a wise business judgement to try to tie their diverse product mix into a sort of central plumbing," said Norman Jaffe, a finance technology analyst with New York broker dealer Fox-Pitt Kelton.

"To gain a greater share of the customer's business an end-to-end seamless approach makes a lot of sense," he added. "That is especially true as the industry faces T+1 settlement and decimalization."

A key component of STN is B-Net, a routing network used by Nasdaq agency desks to send orders to market makers. SunGard picked up B-Net along with BRASS when it bought ASC in March 1999.

Right now most of the 250,000 trades that pass through STN are the agency orders of about 250 B-Net subscribers. To stimulate more institutional traffic, SunGard bought Decalog, vendor of Idee, the buy-side order management system. Like BRASS, Idee is now a node on STN, enabling buy-side traders to electronically route orders to sales traders also on STN. The two OMSs are crucial to SunGard's plans to compete against the half-dozen vendors that dominate the buyside-sellside order routing game.

"We have the desktop," Greifeld said. "Now we're providing the highway." Nevertheless, SunGard has agreed to link to rival networks: Thomson Financial's TradeRoute, and Bridge's IOE/2 and Triad systems.

Once those institutional orders hit the sales trader's screen, SunGard also hopes to carry them to their final destination. Whether it's to a market maker or to the floor of the New York Stock Exchange, SunGard wants STN to be the vehicle.