Brokerage

Smart order routing, a technology that debuted in the Nasdaq market in the late 1990s, is being overhauled and revved up for the Regulation NMS era. Brokerage firms are spending millions of dollars and countless man-hours to update a tried-and-true workhorse of automated trading for a more complex and data-intensive trading environment.

Fewer brokerage firms on Wall Street are feeling the buyside's love these days in the form of trading commissions. More than half of the buyside firms using client commission arrangements, or CCAs, to pay for research have made deep cuts in their brokerage lists, according to a Traders Magazine survey.

Despite the leveraging power and greater returns it potentially provides, portfolio margining has exited the gate at a trot, although Wall Street pros anticipate its pace will build to a steady gallop before long. Portfolio margining represents the biggest change to margin rules since the Securities Exchange Act of 1934, many say.

Block trading won't change much under Reg NMS.

Block trading won't change much under Reg NMS.

Equities trading revenues in 2006 grew sharply for the second year in a row at the top firms. The 11 major investment banks took in about $53 billion, an increase of 37.5 percent over the previous year. The group dominates trading of cash equities and equities derivatives globally and reaps the lion's share of the revenues.

In February 1971, the workaday lives of hundreds of over-the-counter market makers were permanently transformed. That was when the National Association of Securities Dealers started requiring dealers to publish their quotes on a brand-new computer system continuously throughout the day.

Pension funds realize firing a money manager or a group of them can be expensive. They know there are plenty of trading costs and operational risks that accompany the implementation of new investment strategies, moving assets between investment managers. But no pension fund likes to get taken for a ride and overpay. Yet that is exactly what some pension funds feel has been happening-and some transition management pros agree. "We believe in our firm that the transition management community has not provided the solutions for plan sponsors," says Hari Achuthan, head of strategy and sales for transition management at Credit Suisse.

Sweep Orders Debut

Sweep Orders Debut

Trading costs just dropped a bit. Section 31 fees have been cut by the regulators some 50 percent, falling to $30.70 per $1 million of transactions on exchanges and OTC business.

Goldman Sachs, looking to bolster its third-party research program, set up a new business to house and market vendor-supplied research services. Called Hudson Street Services, the entity complements Goldman's Hudson 3RB, through which the firm promotes the research of hundreds of broker-dealers.