As part of an evolving prime brokerage model, Atlanta-based NorthPoint Trading Partners, LLC is offering its hedge fund clients direct connectivity to FIX Flyer’s Financial Trading Network (FTN) platform for their automated trading strategies.
The connectivity is targeted at hedge funds that are automatically executing hundreds if not thousands of orders per day, according to the prime brokerage firms’ executives in an interview.
According to Doug Nelson, CEO and co-founder of NorthPoint Trading, FIX Flyer provides the agency broker with a FIX connection, which allows clients to use automated trading systems to connect directly into Goldman Sachs Execution and Clearing, L.P. (GSEC).
Acting as a prime broker to small and medium-sized hedge funds, NorthPoint is also an introducing broker to GSEC, which serves as the clearing firm and has custody of all the securities and assets. (In addition, GSEC can provide access to other prime brokerage services, such as securities lending portfolio.) NorthPoint selected FIX Flyer as an outside service to provide the FIX connectivity and integration with GSEC.
The hedge funds and other institutional fund managers and managed accounts have built their own automated trading systems and are using NorthPoint’s relationships with exchanges, ECNs, smart order routers and dark pools, to execute their orders. NorthPoint is trying to provide connectivity into GSEC, explains Nelson.
“They’re just a more efficient way to provide a FIX connection to our clients,” says Michael DeJarnette, president and co-founder of NorthPoint Trading in Atlanta. “We prefer to outsource everything and they seem to be the best solution for us,” says DeJarnette, who together with Nelson, were previously partners at Neovest, an electronic trading platform sold to JP Morgan in 2004. They founded North Point, an institutional securities brokerage firm, in 2006, which is providing prime brokerage services as well.
Ivy is Editor-at-Large for Advanced Trading and Wall Street & Technology. Ivy is responsible for writing in-depth feature articles, daily blogs and news articles with a focus on automated trading in the capital markets. As an industry expert, Ivy has reported on a myriad ... View Full Bio