The International Securities Exchange (ISE)--the all-electronic options market that is now scheduled to launch on March 24, 2000--has hired Davidge Data Systems to develop order routing connectivity software for its OM Technology-suppliedtrading engine. The connectivity software is expected to allow ISE's members touse their own order routing systems and protocols to send an order directly to theexchange's trading system, which will basically be an options version of OM's so-called Click Exchange platform.
Gary Katz--senior vice president in charge of marketing and business developmentat ISE--says that the Davidge-developed connectivity application will eliminatethe need for exchange members to write to OM's application programming interfacefor Click Exchange. Currently, Katz explains, clients of the system must use OM'sproprietary API to "send in orders and cancellations and perform queries of the market."
However, via the Davidge-developed application, ISE members will be able to routeorders to the ISE just as they would to any other options market--regardless ofwhich messaging protocol they prefer. "What we wanted to do was map members'current order routing protocols into the OM API... and Davidge knew the OMformats, as well as the current options formats," explains Katz.
That mapping capability may prove particularly beneficial for ISE members who usethe Financial Information Exchange (FIX) protocol. If, for example, a firm uses FIX to send an order to the American Stock Exchange, the Davidge software willenable them to use the same protocol to route an order to the ISE's tradingengine. "What we will do is take that order exactly as they send it into the Amextoday and translate it into the OM API, so that the members don't have to doanything," says Katz.
While declining to specify which other software vendors the ISE evaluated, he saysthat Davidge's FIX capabilities put the firm over the top. In addition, Katz saysthat Davidge's reputation in the industry contributed to the ISE's selection.
"What we were looking for was someone that had a great deal of experience... andDavidge is an existing technology. They aren't a software company that's saying'let me get into this business.' They've been there," he says. TheDavidge-developed software, Katz adds, will reside in the ISE's data centers inNew York and New Jersey.
While declining to specify how many firms have already signed up to become membersof the ISE, he says the exchange should have no problem attracting order flow."Every broker/dealer on the Street, in my expectation, will be a member here,"predicts Katz.