July 2005 COVER STORY Reinventing the Relationship The buy and sell sides are at a turning point in their relationship. As the buy side takes greater control of its trades, the sell side is trying to find new ways to add value. Following are both perspectives on how the relationship is changing. The New Sell-Side Trader: Execution Consultant Brokers are morphing into execution consultants to advise the buy side on selecting algorithms and measuring performance. But how will the sell side reinvent the institutional sales trader?

SPECIAL REPORT The Next Big Thing So, what IS the next big thing in the financial services technology space? What can every CIO and business line manager expect in the coming year? FOCUS ON: VoIP SIA Seeks VoIP Deal The Securities Industry Association is trying to strike a deal on behalf of its members that would reduce the cost of IP networks. CIO CHALLENGE E-Servicing As more and more clients look to conduct transactions via electronic channels, investment management firms are improving their electronic servicing systems. Boosting online search capabilities and integrating call center systems and Web platforms can enhance self-service. BUSINESS LINES The Shift to Holistic Compliance Mounting public pressure and cost burdens are motivating financial services firms to centralize their compliance efforts. Time For a Change TD Waterhouse upgrades anti-money laundering efforts with a third-party solution from Mantas. Data Volume Skyrockets Because of the proliferation of algorithms and black-box trading, data messaging rates are multiplying, causing capacity issues. The Right Mix Building a cost-effective technology portfolio requires careful planning and a balanced approach. Outsourcing SMA Operations As the separately managed accounts space takes off, investment managers are looking for outsourcing options to scale their operations. Is It Safe? As numerous security breaches have been reported, financial services firms are ramping up their security efforts to protect consumers' data. PERSPECTIVES Market Consolidation: An End to Fragmentation? The No. 1 challenge faced by buy-side head traders - by far - is market fragmentation, according to a recent TABB Group report.

FROM THE EDITOR Breaking Up Is Hard to Do Is the relationship coming to an end? Will we be hearing the big "D" word, or is the relationship between the buy side and sell side just maturing and evolving, as all long-standing relationships do? PRODUCT WATCH ACM Targets Broker-Dealers LightPort Streamlines Reporting Automated Policy Enforcement Vidius Plugs Information Leaks HP Eases Compliance Monitoring Peregrine Helps Cut IT Costs PEOPLE & CAREERS Leman Heads Execution Trading at HSBC Gardner Leaves Frank Russell for IDI Deutsche Bank's Lehrman Moves to Merrill Keeping Tabs Thomsen Replaces Cutler at SEC Enforcement Head Messinger Joins Pershing Wellington Takes On Ops and IT UP FRONT Top 5 Risk Initiatives IT Help Wanted Investor Distrust Fast Facts Dear CIO... Question: As it increasingly provides tools for algorithmic trading, pre-trade analytics and transaction cost analysis to the buy side, is the sell side disintermediating itself? INDUSTRY VOICE Infrastructure Integration By: Christopher Wrenn, Managing Director and COO, HVB Americas Many corporations are daunted by the challenges of integrating their technology infrastructures with their business processes.