July 2006

COVER STORY Disruptive CEOs Combine Vision, Strategy & Technology When it comes to market-changing business strategy, technology is no longer an afterthought. The four CEOs profiled on the following pages have proved to be masters at leveraging technology to reshape the market. Ahead of the Curve As the founder, chairman, CEO and president of ITG, a pioneer in electronic trading and one of the industry's first crossing networks, Ray Killian understands the importance of technology innovation. Fourth Time Is a Charm For Seth Merrin, founder and CEO of institutional broker Liquidnet, succeeding in the fastest-moving marketplace in the world is about moving just as fast as the market. Market Creator David Krell's ISE shook the options markets to their foundations, all while bringing institutions into the options market. Up next: a new stock exchange. From Rags to Automation Since 1977, when Thomas Peterffy left a job developing commodities-trading software to become an operations trader on the AMEX, he has refused to accept the status quo of the trading community. BUSINESS LINES Finding the Perfect Pair Louis Capital Markets develops quant model to sift through 180,000 equity pairs and select the top 15. Indirect Hit Although MiFID has yet to fall on the EU, the global nature of the industry demands that U.S. firms pay attention to the changes at hand. Settling the Score Continuous linked settlement is proving to be a major coup for the financial services industry, and corporate clients are taking notice. INDUSTRY VOICE Prioritizing E-Discovery E-mail records create a unique problem: Employees consider e-mail to be private and informal while investigators consider e-mail to be a formal business record and will hold a company accountable for e-mails' contents.

FROM THE EDITOR Careful What You Wish For Just a few weeks ago, the providers of technology, services or just plain advice for Reg NMS compliance were anxiously awaiting this year's SIA Technology Management show in New York in hopes of signing many new deals and having a robust fiscal quarter. CIO CHALLENGE The Challenge: Lately, it seems that one investment management firm after another is outsourcing back-office functions. But as providers expand their service offerings beyond the back office, how do CIOs determine which functions to keep in-house? PRODUCT WATCH Authentication Gets Deeper SunGard Upgrades Platform Monitoring The Flow Increased Database Efficiency PFPC, STN Address Compliance Tableau Makes Analyzing Easier FEATURE Top-Down Innovation CEOs have another - and an increasingly urgent - assignment to add to their leadership portfolios: driving innovation and tearing down barriers that may prevent it. SHIFTING GEARS Former FBI Man to Lead BofA Security Harts to Head BAS Equities Strategy Janowsky Moves to FX Solutions Keeping Tabs UP FRONT Bringing It Back Home Airing Out The Laundry Positioning for Consolidation The Online Generation Room for Improvement Shouldering the Burden Regs Create Revenue Spending More Can Be Satisfying Ask the Experts PERSPECTIVES Swimming Upstream Online brokers are in the news again.