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Eze Castle's Offering Helps Investment Managers Stay Compliant

Eze Castle software gives investment mangers floor looks and an audit trail to boot.

Eze Castle has recently released the second version of its Market Looks instant messaging solution that provides a direct, real-time connection between floor brokers in the pits of exchanges and investment managers that need constant floor-looks (updates on stock prices) in a hurry.

The Eze Castle solution consists of a software offering that investment mangers download onto their PC. The software involves XML and works in any Windows environment including NT, 2000, 98 and 95. The investment manager's PC sends requests for floor looks and instant messages down to the floor-brokers PC, which then sends the information onto a handheld wireless device such as a Casiopia, made by Casio.

In order for such technologies to be allowed in the exchange, Eze Castle had to prove that they could send information between the investment manager and the floor broker without degrading the integrity of exchange firewalls. That, they were able to do, says Hubbard, by giving headers to their messages which allowed them passage through firewalls without opening a port. Such openings raise security concerns because they might also serve as a gateway for hackers. Additionally, any information traveling over between the investment manager and the broker is sent with 160-bit encryption.

The value proposition in the product comes from automating a process that was time consuming and inefficient. "Basically you would have to go though a whole chain of command to get the message down to the floor that you want to look on--AOL, IBM--whatever it is and then they go to get the quote, get the look, hand write it,"explains Hubbard, "then that gets sent back up through the telephone but again, it goes though several layers. You never had a direct connection between the investment manager and the floor broker."

Hubbard also says that if an investment mangers is getting their floor looks through a third-party firm's desk, they might not be getting the most timely information due to the occasional conflict of interest. "If you are going though firm x's desk and they've got an interest in that information, maybe they're not going to be as quick to let you know what's going on."

A major selling point of the new version, he adds, is the databasing function which records every message--something required under Securities Exchange Commission Rule 17 (CFR 240 17a-4). At the same time, the instant messaging function allows floor brokers to "put in other notes and other information as far as who is hanging around the booth and who has been buying,"he adds. The combination of instant messaging and real-time floor looks is something, Hubbard claims, no one else is currently providing.

Firms can obtain the software at a price of $1800 per seat, per year. As of press time, Hubbard was unable to release the names of any investment management firms currently using Market Looks.

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