Targeting its institutional customers, the Brass Utility (Brut) electronic communications network (ECN) expects in the next three weeks to go live with an interface connecting its Universal Market Access (UMA) front end with the New York Stock Exchange's Designated Order Turnaround (DOT) system. Brut, which currently trades only Nasdaq stocks, has built the electronic connectivity to DOT in anticipation of trading NYSE-listed stocks--for the first time--in the second quarter. Separately, it has launched Brut.com--a Java-based, front-end software device aimed primarily at day-trading firms--this week.
Brian Hyndman, president of Brut, says that, through UMA, the ECN plans to provide its clients with two order-routing options for NYSE-listed issues within the next month. One of those options will be an electronic gateway that enables clients to route "small orders," or orders for 1,000 shares or less, to the NYSE's DOT via UMA. The other option will empower clients to route listed stock orders from UMA to AXIS Global--a Brut affiliate that operates as an independent two-dollar broker on the floor of the NYSE.
"If somebody's got a 10,000-share order, for example, they can send it down electronically to our floor broker, who will then go ahead and work the order for them," explains Hyndman. "AXIS is really known for its wireless device. People can send them orders electronically, and it will pop up on this handheld wireless device allowing them to work the order in the crowd, give people looks and send indications of interest back."
Within three months, Brut also intends to match listed orders internally via its trading engine. "Right now, were only going to send listed orders out. But in the near future, we're going to start crossing those orders in our own book," he says.
Primarily, Brut is looking to market UMA's new electronic connectivity capabilities for listed stocks to its institutional client base--which includes hedge funds and mutual funds.
"We can offer another suite of services to them, not just the OTC trading," says Hyndman. "Right now, we have one front end that they use for their Nasdaq trading. So why should they have to go to another front end to do their listed trading?"
Meanwhile, separate from its UMA enhancements, Brut is also trying to grab a niche in the day-trader market segment. Today, Brut's client base--comprised mainly of broker/dealers and institutions--is nearly bereft of day-trading firms. But the ECN is hoping to penetrate the day-trading market through the recent launch of Brut.com--an easy-to-install, front-end workstation device that makes use of Sun Microsystems' Java programming language.
Clients can receive Brut.com either over a dedicated line or the Internet--and it's cheap, because it costs "virtually nothing" to roll out, says Hyndman. Thus far, he says, 12 firms have "expressed interest" in the product. Brut.com is scheduled to be installed at its first client site on April 17.