Commentary

Elaine Wah

Modern Markets, Modern Metrics - A Blog By IEX

In this blog by IEX's Elaine Wah, the newest public exchange looks to refute public claims that the metrics it uses are designed to inflate its own volume numbers and mislead people.

Traders Poll

Do you think it's a good idea to conduct an access fee pilot to assess the pricing models used by many trading venues?

Yes

67%

No

0%

Should have had a pilot program a long time ago.

33%

Free Site Registration

May 25, 2007

Nasdaq's Newest Face Comes with a Big-Board Pedigree

By Michael Scotti

Nasdaq Launches Dark Pool

*Nasdaq will introduce a new crossing system that will match up block-sized orders continuously. That's according to Chris Concannon, Nasdaq's executive vice president in charge of transaction services.

The new system will complement Nasdaq's opening and closing crosses as well as an intraday cross slated to launch soon. Concannon, speaking at the annual Security Traders Association conference in Scottsdale, Ariz., described the system as a "dark liquidity pool hidden inside the liquidity of the continuous market." Block orders residing in the new system will interact with other blocks in the system as well as the main Nasdaq market "when it can satisfy the block size," Concannon noted. The new service will not become operable until Nasdaq merges its three trading platforms into a single system that Nasdaq has dubbed Single Book.

-Peter Chapman

RBC Direct Market Access

*RBC Capital Markets' recent acquisition of Carlin Financial Group gives the mid-tier institutional brokerage direct market access technology, putting it on a par with its larger rivals.

The system known as CarlinAccel is used by Carlin's predominantly hedge fund clients to trade about 35 million shares per day, Carlin execs say. CarlinAccel is mostly used to trade equities and has modules for pairs, dollar-neutral and basket trading.

RBC, a division of Toronto's Royal Bank of Canada, will invest in the product to expand its utility to RBC's existing customers for trading equities and other asset classes, RBC says. The firm will create a new division called RBC Carlin. It will be run by Carlin chief executive Jeremy Frommer, a 17-year industry veteran.

Frommer joined Carlin when it bought NextGen Trading, a developer of merger arbitrage software. Previously, Frommer was employed by the Royal Bank of Canada as director of merger arbitrage and event-driven trading. The RBC-Carlin deal mirrors those of U.S. investment banks such as Citigroup, which bought Lava Trading, Lehman Brothers (Townsend Analytics) and JP Morgan (Neovest).

-Peter Chapman

 

*Robert H. McCooey added his name to the list of executives who recently made sudden career changes in equity trading after many years at one firm. McCooey, whose family name is synonymous with the New York Stock Exchange, last month joined the Big Board's arch-rival Nasdaq, filling a newly created position in its capital markets group. The job cuts across Nasdaq's business units. McCooey will work with private equity firms, investment banks and institutional investors.

McCooey had been president and CEO of the Griswold Co., a floor brokerage firm he started in 1988. Matthew McConnell, senior managing director and chief operating officer of Griswold, was named president and CEO of the firm.

From a competitive standpoint, commented one floor broker, no one knows more about the NYSE's inner workings than McCooey. He sat on numerous boards and committees at the exchange and had been one of its leading spokesmen. The hire was a coup for Nasdaq, the broker said.

"The industry is undergoing a complete transition with Reg NMS and the hybrid coming," explained a floor broker who knows McCooey. "I think Bobby saw this as an opportunity to do something different and to get exposed to new areas, which is exciting."

-Michael Scotti