Wall Street & Technology: Blog

« June 2007 | Main | August 2007 »

The SEC has revealed that Morgan Stanley CFO David Sidwell, Microsoft Corp CFO Christopher Liddell and Jeffrey J. Diermeier, former global chief investment officer at UBS Global Asset Management, will be among the 17 financial industry experts charged with making the U.S. financial reporting system more useful for investors and less complex for U.S. companies.

“In 1971, I was a high school graduate with no aspirations of college and no money for college, in fact I couldn’t afford to buy a piece of clothing at a store until I was 17,” related Diane Schueneman, senior vice president and head of the global infrastructure solutions group at Merrill Lynch at an unusual commencement ceremony today. Instead of pursuing higher education, Schueneman got a job at the Thundering Herd right out of high school. The twenty young people in the audience who were receiving graduation certificates from a year-long IT training and recruiting program called Year Up were all around 17 too, either high school graduates or GED holders about to start full-time work at Merrill Lynch, Lehman Brothers, Morgan Stanley, and JPMorgan Chase. Several had brought their own child and their mother as guests.

Today is William (Bill) O'Brien's first day on the job as CEO of Direct Edge ECN. He began this new role by reaching out to the trading community of current and potential customers with an email that explains why he is coming back to the ECN world. I'm not familiar with CEOs in other industries so I can only say that in the ECN community, this seems to be a trend that works to attract liquidity. Direct Edge had record volume of more than 440 million shares on Thursday so it's important to get the word out.

Does this mean that Direct Edge's CEO will be following the style BATS Trading former CEO Dave Cummings in sending out his famous emails ? I don't think so. Last week we ran the email of Joe Ratterman, BATS Trading's new CEO who indicated he would be sending out monthly emails and the tone would reflect "the new management and personality of BATS." It is only fair that we share with you Bill's first email — after all, it's likely to be the first of many.

Watching the gruesome, global train wreck that is hedge funds heavily invested in collateralized debt obligations (pools of bonds, loans or other assets, the subprime mortgage pools being the ones in the most trouble today), we wonder, is something wrong with the models investment firms use to price and gauge the risk of these derivatives?

The age of outsourcing to India for the cheaper labor costs is over, according to S. Premkumar, corporate officer and global head-financial services at Indian outsourcing firm HCL Technologies. Where once a function performed by 100 U.S. employees could be handed over to 100 Indian employees who could do it for significantly less, the diminishing value of the dollar combined with the strengthening of the rupee and increasing salary levels in India have wiped out the benefits of such labor arbitrage, he points out. Captives, too, have lost their luster, Premkumar says – they don’t grow well because they’re too focused on cutting costs and they’re not good at sharing people and resources.

With dark pools gaining traction among institutions seeking leak-proof matches, one of the world’s largest liquidity pools is venturing into the crossing network space. By the end of this summer, NYSE Euronext is expected to launch NYSE MatchPoint – a point-in-time benchmark crossing-network geared to large index funds and mutual funds looking to matching portfolios of stocks.

If your company has leapt onto the Web 2.0 bandwagon – embracing applications like blogs, wikis and podcasts that foster increased collaboration and communication - it could be exposing its corporate networks to new attacks from hackers.

Is there a possibility that MiFid and Reg NMS could one day be accepted by regulators on both sides of the Atlantic as being equivalent?

To what extent do you base investing and deal-making decisions based on who you know at the companies involved? Thomson Financial has teamed up with search/analytics firm Generate, Inc., to capitalize on investment bankers’ need to know with whom they are dealing. Generate’s tools can analyze a web page or a customer record and map the people and companies mentioned therein to other sources of information about people and companies – primarily large databases filled with information gathered from the web. With this combination, users of Thomson data and products will be able to click on the name of a person or company and view a profile of the individual or firm with related links.

Dark pools give us something to talk about when they release volume figures. On Monday, BIDS Trading L.P., an alternative trading system (ATS) focusing on U.S. block equity trading, announced it had executed more than 20 million shares in daily volume twice last week. BIDS Trading operates BIDS ATS, an anonymous trading system launched in the spring of 2007 by a consortium of major brokers. Even though the nascent block-crossing venue has plenty of competitors in the ATS space including Liquidnet, ITG POSIT, NYFIX Millennium and Pipeline Trading, BIDS appears to be building momentum right out of the gate because of the liquidity pools and customer bases of its strategic partners.

In a move that could eventually make life easier for the SEC, research analysts and mutual fund investors, printing company RR Donnelley announced today a service that converts ordinary mutual fund financial statements into XBRL (Extensible Business Reporting Language)-formatted files. These files, in which each data element is tagged with a standard identifier, can then be analyzed by software for any purpose – to calculate ratios, to compare several funds’ costs, to analyze risk, and so forth.

With liquidity and quote traffic escalating across the options exchanges, On Point Executions —an agency-only broker dealer — has launched a smart-order routing solution today called STING that can sweep all six equity options exchanges simultaneously to extract 100 percent of the displayed liquidity. The options broker caters to the sell side has been beta testing the smart-order router and sweeping technology since January with several broker-dealer clients and market makers.

This week, Themarkets.com, the investment bank-owned platform that packages and delivers the banks' analyst research to their institutional investor clients, announced that it's just completed a $30 million Series S Rights Offering to its 11 existing investment bank owners (Merrill Lynch, Goldman Sachs, JPMorgan Chase, Morgan Stanley, BofA Securities, Credit Suisse, Citi, Deutsche Bank, Dresdner Kleinwort, UBS, and Lehman Brothers) and its twelfth owner Reuters. Today we caught up with president and CEO of TheMarkets.com, David Eisner, to find out what he plans to do with all the new cash.

The Securities and Exchange Commission (SEC) has adopted an anti-fraud rule that makes it easier for the regulatory body to sue money managers who mislead or defraud investors, including those in hedge funds.

With the near collapse of two hedge funds last month at Bear Stearns Asset Management from investments in complex mortgage backed securities, risk management experts are pointing out the hazards of valuing illiquid securities. Recent research by Riskdata, into a sample of over 1,000 hedge funds reveals that at least 30 percent of hedge funds trading illiquid strategies are smoothing returns.

Nine out of 10 capital markets executives say their firm is not ready for globalization and doesn't know how to get there.

By Raghuvir Mukherji
Senior Consultant, Financial Securities
Domain Competency Group
Infosys Technologies Ltd.
Raghuvir_mukherji@infosys.com

After giving traders and order routers a bad scare in the form of algorithmic trading, technology is now in a position to threaten equity analysts, or make their job simpler, depending on where one is in the equity analysis ‘value chain’. The advent of the internet and the use of XML (eXtensible Mark Up Language) enabled the quick transmission of information across the globe between people and machines using different software systems.

May 2008 Sun Mon Tue Wed Thu Fri Sat         1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 Weblogs of Interest Dark Reading: Firewalled Chief Risk Officer: New Era of Risk Management InformationWeek's Blog Digest Parry Aftab, the Privacy Lawyer

Categories Asset Management Wealth Management Authors Cory Levine Greg MacSweeney Ivy Schmerken Melanie Rodier Penny Crosman Compliance Data Latency News Analysis OTC Derivatives Operations Security Podcasts Risk Management SIFMA TMC Trading Archives May 2008 April 2008 March 2008 February 2008 January 2008 December 2007 November 2007 October 2007 September 2007 August 2007 July 2007 June 2007 May 2007 April 2007 March 2007 February 2007 January 2007 December 2006 November 2006 October 2006 September 2006 August 2006 July 2006 June 2006 May 2006 April 2006 February 2006 January 2006