Jefferies Execution Services is getting faster.
The NYSE member agency brokerage arm of Jefferies & Co. has signed a deal with NYSE Euronext’s commercial technologies division to license its risk management gateway. The managed service will allow the Jefferies division to offer speedier throughput to its high-frequency trading customers.
"Risk-controlled speed to market liquidity is key," Al Petrillo, president of Jefferies Execution Services, told Traders Magazine. "We must be able to provide that service in a controlled and risk-monitored environment."
Currently, Jefferies’ high-frequency clients access the markets through Jefferies’ infrastructure. The deal with NYSE Technologies includes only the risk management gateway for now. But Jefferies is also "taking a hard look," Petrillo added, at NYSE Technologies’ high-speed market data delivery and co-location services, the logical next steps.
All brokers offering sponsored access to marketplaces will be required to risk check their customers’ orders before they’re sent to the markets if the Securities and Exchange Commission approves a new rule banning "naked access," as is likely. Many are scrambling to find risk management software speedy enough to satisfy their high-frequency trading customers. Jefferies already performs risk checks, Petrillo noted, but needed something faster.
The deal gives Jefferies’ customers high-speed access to four or five public markets and about 15 alternative trading systems.