Interactive Brokers Builds Links to SWX, ECNs

Interactive Brokers (IB) LLC has built an interface between its order execution network and the Swiss Stock Exchange's (SWX) electronic trading platform.

The link is expected to equip IB's network clients--comprised mainly of U.S. and Europeanbroker/dealers and institutional fund managers--with a speedy electronic mechanismfor sending orders directly to the SWX.

At the same time, IB--the electronic brokerage unit of proprietary trading firmThe Timber Hill Group--has signed deals to develop interfaces to a pair ofelectronic communications networks (ECNs): Bloomberg Financial Markets' Tradebookand the Brass Utility (Brut). Once those links are complete, IB will offer itsclients connectivity to a total of four ECNs. The vendor has already builtinterfaces to Chicago-based Archipelago LLC and Datek Online Holding's Island.

Lorianne O'Connor, v.p. in charge of sales at IB, says the vendor has completedthe link to the SWX, and plans to start offering that gateway to clients of itsorder execution network "within the next two weeks." Thus far, she says, three ofIB's clients have signed up use the SWX gateway, including one "large fundmanager" and two European-based retail brokerage firms. "There's a large demandfor the link coming from our European client base, because it allows them tohave access to pan-European basket trading," says O'Connor.

While declining to specify the total number of broker/dealers and institutionalfund managers currently using IB's network, O'Connor notes that the interface tothe SWX is just one of many exchange gateways IB has built. IB, she says, haswritten to the application programming interfaces (APIs) for the electronictrading systems used by stock and derivatives exchanges in Switzerland, Germany,Sweden, France, the U.K., Spain, Australia, Hong Kong, Canada and the Netherlands."We offer full service execution in stock, futures and options. There isn'tany IB competitor that can bring you into all those places from a single entrypoint," O'Connor claims.

Meanwhile, in terms of IB's ECN gateways, O'Connor expects an interface to Brut--asystem that is minority owned by Merrill Lynch, Goldman Sachs and Morgan StanleyDean Witter--to be completed within a month. She adds that the link to Bloomberg'sTradebook will be finished "shortly," but declines to specify a time.

In addition to the aforementioned ECNs and exchanges, IB has also developed aninterface between its network and the electronic order-entry systems of the NewYork Stock Exchange and the American Stock Exchange. IB offers its network toclients via a trio of delivery mechanisms: the Internet, a dedicated line or acomputer-to-computer interface.