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John Turney
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Foreign Exchange Infrastructure: Yesterday, Today and Tomorrow

In this exclusive to Traders Magazine, John Turney, Global Head of Outsourced FX at Northern Trust, discusses the evolution of the fx infrastructure and what is to come.

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January 3, 2006

Intermarket Trading System to Be Replaced

By Peter Chapman

The Intermarket Trading System is gone.'

That's according to New York Stock Exchange president and co-chief operating officer Cathy Kinney. The ITS, an order routing mechanism that links nine market centers, is being replaced by a system called NMS Linkage. The proposed system will be operated by the New York Stock Exchange.

Kinney offered details about the system at the annual trader's confab in Boca Raton. NMS Linkage will permit those exchanges that choose to plug in to send and receive trade messages.

To join the consortium, Kinney explained, each market must be able to automatically execute incoming orders over NMS Linkage. To access the system, traders will have to be members of one of the exchanges. If that's not possible, they may access NMS Linkage through an exchange member.

Traders will pay the transaction fees of the markets in which their trades are executed. "Just as if you came to that market through the front door," Kinney added.

NMS Linkage would likely operate for no more than one year, Kinney said. After that, members would establish private linkages to one another. The New York will use the technology of merger partner Archipelago for its linkages, Kinney said.

Kinney expects the members of the proposed system to soon jointly file their plan with the Securities and Exchange Commission.