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September 12, 2006

SIA Tech Draws Latest Gadgets & Vendor Heavyweights

By Nina Mehta

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  • SIA Tech Draws Latest Gadgets & Vendor Heavyweights

The full panoply of electronic trading devices was on display at the Securities Industry Association's Technology Management Conference & Exhibit this year. Hawkers of order management systems, direct market access, algorithmic trading servers and high-speed data management were sprawled out over three floors of the Hilton New York. On the DMA front, newbies mixed it up with old-timers. Many of the independent providers of direct market access technology were long ago snapped up by large broker-dealers, but a few remain unattached. SDS Financial Technologies is one. The New York-based vendor debuted its SDS Trader platform at

the show. The system permits trading of domestic cash equities and options. It will soon include futures. SDS Trader's first two brokerage clients are On Point Executions and Raymond C. Forbes & Co.

Buyside Focus

SDS Trader is geared toward sellside firms, but will begin pursuing the buyside by the end of this quarter. The firm may be new to DMA, but has been around for nearly 20 years. Its roots are in the market data business.

DMA stalwart Neovest was in attendance at the show and claimed its client base has jumped about 30 percent since it was bought by JPMorgan last September. The reason for the boost, according to chief executive Bryce Byers, is "tremendous growth in the broker-dealer services business," with about 20 brokers offering the product to clients. More than 90 percent of Neovest's users are hedge funds. "They want to trade and risk-manage their business. They're not interested in running applications and FIX engines," Bryce adds.

The platform offers trading in equities, options, futures and international securities. Last December Neovest added access to six European exchanges, with another five this past May and five Japanese markets over the summer. Funds that were long/short-only are now doing more international trading and are interested in more asset classes, notes Byers. He says options trading on the platform has increased about 70 percent over the last year.

The vendor is run independently as a wholly owned subsidiary of the broker-dealer.

On the order management front, the persistent theme is more tools to streamline the workflow, more transaction cost analysis, and more multi-asset-class functionality. To meet customer demand, OMSs across the board are adding exchange-traded derivatives, foreign exchange and options functionality to their equities platforms.

ITG's subsidiary, ITG Solutions Network, announced the completion of the first phase of its integration with Macgregor, one of the largest buyside order management systems. Macgregor customers can now access Logic, the company's pre-trade analytics product, directly from their blotter. Post-trade analytics that evaluate the performance of a broker for a given day, or for the last five days, have been integrated into the Macgregor platform as well. Macgregor users now also have seamless access to the LehmanLive LINKS trading and analytics platform from their blotter.

Little BlueBox

Royalblue, an OMS vendor to the sellside, moved into broker-dealer territory with its introduction of algorithmic trading strategies. Its four "BlueBox" strategies include VWAP, TWAP, arrival price and percentage-of-volume. BlueBox integrates with Royalblue's Fidessa OMS. The target audience is broker-dealers who may not have the wherewithal to develop their own algos.