1999 was a year of sweeping change in the financial services technology industry. In the U.S., the growth of ECNs and online trading gave rise to significant restructuring in the equity markets, while the threat of electronic competition expedited a demutualization trend in the futures markets. Over in Europe, meanwhile, financial services firms witnessed the birth of a buy-side-oriented equity-crossing network and adapted to the continent's euro conversion.
Across the globe, the FIX messaging protocol made headway and alliances between various financial institutions grabbed headlines. The most notable partnerships in the trading realm occurred in the derivatives markets, where the Chicago Board of Trade linked up with Eurex and the Chicago Mercantile Exchange allied with London International Financial Futures and Options Exchange. Those alliances effectively divvied up the sides in the battle for worldwide futures-and-options market share.
On the market data end, the industry was also shaken up by an alliance. While it did not have the impact of Bridge's 1998 takeover of Dow Jones Markets, the acquisition of A-T Financial by Waltham, Mass.-based Primark Corp. could eventually result in greater competition for the big four real-time market data vendors in the U.S.
The landscape of operations, on the other hand, was forever changed by the merger between the Depository Trust Co. (DTC)-the world's largest depository-and the National Securities Clearing Corp. (NSCC)-the largest clearing organization in the U.S. By integrating their services and consolidating their boards, the DTC and NSCC hoped to streamline their processes and better serve their clearance and settlement clients.
With the industry racing to implement the best trade order management system and grappling with the Internet, the investment management sector also experienced its share of change in 1999.
But what does the year 2000 hold? Well, we don't have a crystal ball. With projects like decimalization and T+1 on the agenda, however, it's certain to be an interesting year.