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This Week's Tech Update

This week's tech happenings from around the financial-services industry; including briefs on electronic trading, investment technology, risk management, market data and operations.


MB Trading - a New York-based direct-access broker - picked Radianz to provide networking that links banks, brokerage, market makers and institutional clients in the United States and Europe to the electronic order- routing and transactional services offered by MB's institutional division. This augments MB's current use of Radianz's services for FIX (Financial Information eXchange)-based connectivity to major electronic communications networks used by financial professionals to trade equities.

FIX Protocol Ltd. (FPL) and The Futures Industry Association (FIA) both signed a memorandum of understanding last week to extend the standard's reach into the futures and options industry. Under the agreement, both organizations will jointly serve on FPL's Global Derivatives Committee to further address the needs of the derivatives marketplace. This formalizes a longstanding working relationship. The FIA Standards Working Group was instrumental in adding derivatives functionality to FIX 4.4.

Gain Capital struck a liquidity and technology partnership with London Capital Group - a London-based broker specializing in electronic exchange-based markets. LCG is now offering 24-hour foreign-exchange trading services through a newly created division, LC Forex (www.lcforex.com). In addition to white labeling Gain's proprietary online forex trading platform, LC Forex also uses Gain's liquidity, execution and back-office services. Gain, a futures commission merchant (FCM) based in Warren, N.J., provides 24-hour liquidity in 14 currency pairs and is now adding support for four new Scandanavian-currency-pairs at the request of LC Forex.

Commerzbank is installing Credit Analytics, a component of SunGard Trading and Risk Systems' credit risk systems Crediant, to manage exposures across the investment banking division. The German bank will use the standalone system to calculate and aggregate credit risk across a range of asset classes for all derivatives portfolios. The system will also be used to meet German regulatory requirements, which stipulate that banks produce credit risk simulations in step with each level of trading.

Risk Management

The Professional Risk Managers' International Association has opened a Washington, D.C. chapter and has named Syed Ahmad, who has a doctorate in economics, finance and econometrics, as the new Regional Director for PRMIA Washington, D.C. Ahmad is a senior financial economist (Regulation and Research) -- Office of Supervision with the Federal Housing Finance Board.

Results from the International Swaps and Derivatives Association (ISDA) annual survey shows that usage of the FpML (Financial Products Markup Language) have continued to increase over 2003. ISDA reports about 33 percent of medium-sized firms plan to increase use of the standard this year. ISDA's Operations Benchmarking Survey was based upon 64 institutions and identifies operations processing trends in the over-the-counter derivatives industry.


According to a joint survey between the Securities Industry Association and GartnerG2, financial-services firms believe that automating the trade process from trade execution to confirmation and settlement is not only cost effective, but also will result in improved service, better information flow, more efficient query resolution, and an increase in cross-selling opportunities to existing customers. But progress in achieving straight-through processing is mixed, and only a small percentage of firms have calculated the return on investment they will realize. The survey, conducted during April and May 2003, can be accessed at: www.sia.com/stp/pdf/rpt-0703-0057.pdf

SunGard Futures Systems, an operating unit of SunGard, announced that Chicago-based futures-commission merchant Advantage Futures LLC has gone live on SunGard's GMI to manage high-volume back-office processing and accounting of exchange-traded derivatives and futures.

JPMorgan Investor Services announced that it has been appointed custodian and securities-lending agent by Royal & SunAlliance USA (RSA USA) for all of its U.S. insurance assets. The win consolidates all of RSA USA's assets with JPMorgan. In addition, RSA USA will place a significant amount of its short-term cash into the JPMorgan short-term funds.

Also, JPMorgan Investor Services announced that it has been selected by Gartmore Group as global custody- service provider for the Gartmore Funds' $16 billion in assets.Under the mandate awarded, JPMorgan Investor Services will provide global-custody, foreign-exchange, cash-trade-execution, securities-lending and commercial-banking services.

Investment Management

Eaton Vance, a Boston-based investment adviser and mutual-fund distributor, has renewed its contract with PFPC to provide transfer-agency services. Eaton Vance Funds, with $27 billion in assets representing 1.25 million shareholder accounts, has been contracting PFPC since 1987. The vendor will continue to provide transfer-agency services, as well as provide additional services including Internet access for shareholders and print-mail services.

QED Information Systems, a portfolio-management-software vendor, has released Q2 software, targeted for the asset-management community. The solution includes portfolio-management, investment and accounting operations integrated into one desktop application. The vendor claims that the operation enables the user to determine preferences, as well as obtain real-time updates, and generate reports for clients and internal management.

Accounting-software vendor Global Investment Systems, has teamed up with CorrectNet, a vendor specializing in data consolidation and Web-publishing services. The joint venture will enable GIS' fund-administration software to include an online-reporting capability. The product, GIS' WebPortal, will be offered as part of GIS' product suite.

Market Data

Credit Suisse First Boston's Sovereign Data+ Web site will now be marketed by FAME Information Services, a data-management vendor specializing in historical and reference data.The Web site, which includes economic data history and forecasts, financial-market information, news, credit ratings and quantitative models for sovereign-risk analysis, will be available to FAME customers. The tool can be used by users managing cross-border risk.

Arcontech, a real-time market-data vendor, will partner with Radianz for distribution of its products over an institutionally shared network that would eliminate the need for information vendors. The combination uses Arcontech's CityVision StarNet software over RadianzNet to connect producers and consumers of real-time market data via data sub networks.

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