Rob Daly
Traders Magazine Online News

OPINION: CAT NMS is Out of Options

The SROs have no choice but to meet their deadlines.

Traders Poll

Are you ready to comply with the new updates required by the amended Rule 606?

Free Site Registration

December 1, 2002

At Deadline

By Editorial Staff

Euro ATS

*Targeting small brokerages and private clients, Deutsche Bank has started its own ATS at a time when this kind of business has been having problems in Europe. Despite a bad climate, Deutsche's potential success comes from having the biggest trading firm in European equities. Observers speculate that Deutsche's order flow could be a threat to any alternative trading system. Europe's equities market, observers say, is mutating from a research to a liquidity driven market.

However, the development of an in-house trading system by Deutsche raises questions about what it plans to do with Xetra Best, which was started by Deutsche Borse earlier this year. Xetra was designed to take advantage of internalisation and in-house order flow at Deutsche Brse's biggest customers. Deutsche's new in-house system is expected to be fully functional by mid-2003.


*Lava Trading, which uses what it claims is a new, faster technology, seems to be gaining in popularity with the buyside. The firm's evidence? Fifteen of the largest 20 broker dealers have become clients since the firm began operations in February 2001. Several executives have said that the firm's executions are remarkably fast. Lava said that it is executing between 250 million and 333 million shares daily. And it also noted that, on a recent day, Nasdaq volume was 1.76 billion shares.

Lava, potentially, could be another competitor for Nasdaq and its new SuperMontage platform. Lava also has a unique strategy to attract buyside business. Instead of trying to sell to the traders of mutual funds, it is targeting broker dealers to sponsor their institutional customers.

The Boss

*Banc of America, in an effort to upgrade its trading presence in New York, hired Ciaran O'Kelly, a former Salomon Smith Barney executive who had headed its U.S. cash equities trading. O'Kelly has been named global head of cash equities trading at the Banc Of America in New York. However, Banc of America will not close up or reduce its operations in San Francisco, a company spokeswoman said. "We continue to have offices in San Francisco as well as other places such as Chicago and Boston," she said.

In his new position, O'Kelly will be responsible for all U.S. and European trading. He is expected to expand the firm's institutional trading and come up with new cross-product solutions for clients, the company said. At Salomon Smith Barney, O'Kelly, who is a member of the Big Board's Upstairs Traders Advisory Committee, was responsible for Nasdaq, listed and international equities trading, a position he held since 2000.


*Deutsche Bank has finally shuttered the Jersey City office of the firm's NDB Capital Markets. The move, which follows an earlier round of job reductions, means the exit of about another 14 trading pros. These include industry vets Maria Silverstein and Bob Mezey. Deutsche Bank declined comment.

The NDB reduction comes at the same time that several other bigger firms are also laying off financial professionals, including many trading pros. Morgan Stanley disclosed it was firing some 275 professionals, including some traders, analysts and investment bankers. The Chicago Board Options Exchange announced a round of layoffs. These follow job losses at Merrill Lynch and other firms.