Securities Industry News articles from June 2004

Securities Industry News archives from June 2004

Serving Up Spim.(securities)
June 7, 2004... IM's rapid rise on the street could speed spread of unwanted messages, viruses When the Chicago Stock Exchange was searching for a secure way to provide instant messaging to the brokerage members clamoring for it, one of executives' main...

Know-Your-Customer Issues for CLS Bank?
June 7, 2004... The "know-your-customer" rules Ofac has mandated for CLS Bank, the U.S.-registered foreign exchange settlement platform, could have compliance gaps when one of the counterparties is a third-party customer of a CLS settlement bank. Some...

Market Data Revolution.
June 7, 2004... Nasdaq CEO Bob Greifeld raised a few eyebrows this spring when he told regulators market data fees were too high and that he wanted to slash a substantial source of Nasdaq's revenue. "We must limit the monopoly to the data that is part of...

New-Product Focus.(Securities Industry Association)
June 7, 2004... The SIA Tech Show is upon us once again, and a feeling of optimism is palpable (and welcome). Indeed, in the pages of this very issue, TowerGroup's Rob Hegarty predicts that IT spending will top $71 billion this year-up nearly 40 percent from...

From Austerity to Opportunity: A New Dawn for Financial Markets IT.(Column)
June 7, 2004... Extra, extra: read all about it, the market for financial services technology is not dead! It was just sleeping. And while the past three years may have seemed like a dream (more like a nightmare), it looks to be the dawn of a new day. A new...

Are Smaller Investment Managers Being Regulated Out of Business?(USA Patriot Act's Rule 326)(Sarbanes-Oxley Act)(Gramm-Leach-Billey Act)
June 7, 2004... These last couple of years, the investment industry has seen investment managers and advisers face a host of new laws and regulatory requirements, to address concerns ranging from corporate governance within a firm to unlawful activities by its...

If Sales Execs Were CIOs for a Day...(Chief information officers)
June 7, 2004... A primary goal of IT is to drive sales and therefore improve the bottom line. But how about a situation where the salespeople drive IT? The question, "What IT projects make you say let's do that?'" was put to a panel of sales executives at...

Outsourcing at Risk After India's Election? Not Likely.
June 7, 2004... Election season is in full swing. The political incumbents tout a growing economy aided by tax reforms and technology. Yet the country's heartland grumbles that the benefits of this global growing economy don't reach them. They still struggle...

Commission Rips Clearstream Frankfurt.(Clearstream Banking Frankfurt)
June 7, 2004... The European Commission (EC)'s widely expected decision to publicly condemn but not fine Clearstream Banking Frankfurt (CBF) for anticompetitive tactics against Euroclear Bank in the German market may have both sides claiming victory, but more...

Deutsche Bank Sells Majority Stake in ETB.(European Transaction Bank)(Xchanging)(Brief Article)
June 7, 2004... Deutsche Bank's decision to sell a 51-percent stake in its back-office outsourcing subsidiary, the European Transaction Bank, to London-based Xchanging in exchange for EUR40 million is the latest in a series of steps the bank is taking to...

Merrill Forges New Path With Bond Deal.(Merrill Lynch)(MarketAxess)
June 7, 2004... Merrill Lynch's new deal with 18-month-old electronic communications software vendor Clovis for distributing bond inventories and prices could not only boost the firm's bottom line but also pose a competitive threat to established fixed-income...

Securities Firms Ready to Spend on IT.(IT spending)
June 7, 2004... As with all things in the securities business, technology spending is cyclical. Just when the bottom seemed so close, the securities industry began to emerge from a torrential three-year slide this year. CIOs are again asking questions...

The Law of Unintended Consequences.
June 7, 2004... In May 1994, the Los Angeles Times wrote about a study by Professors William Christie of Vanderbilt University and Paul Schultz of Ohio State University, "Why Do Nasdaq Market-Makers Avoid Odd-Eighth Quotes?" The paper, later published in the...

Evolving Standards May Boost Wireless.
June 7, 2004... Wireless networking, though easy to set up and appealing to many users, still poses security risks for Wall Street companies. In the near future, however, as wireless security standards mature, that situation may change. Today, wireless...

Fimat Ready to be Tokyo Trend-Setter.(Tokyo Commodity Exchange)
June 7, 2004... The Tokyo Commodity Exchange (Tocom)'s recent decision to allow Fimat's Australian operation to be the first direct foreign member of the world's second-largest physical commodities exchange could ultimately boost foreign participation in the...

Software Licenses Amid Grid.
June 7, 2004... Here's the scenario. You're running an application on a server. It's crunching numbers and it takes way too long. Meanwhile, you have a bunch of other machines sitting around not being used to their full capacity. You have a brainstorm, and...

When 500 Milliseconds Is Way Too Long.
June 7, 2004... Traditional market data consolidators were once an absolute necessity for financial services firms to receive real-time data and news from information providers. But the data available and the frequency of updates have increased exponentially...

FIX Protocol at 10 Years Old: Plenty of Room Left to Grow.(Financial Information Exchange)(Interview)
June 7, 2004... Throughout the 20th century, brokers and investors traded stocks over the phone or face-to-face. That model continued until the last decade, when trading volumes surged and the industry began looking at automated solutions for sending trade...

Manulife, Hancock Tackle Systems Side of a Mega-Merger: Although integration.(Manulife Financial Corp.)(John Hancock Financial Services Inc.)(trading platform - CanDeal)
June 7, 2004... Not usually one to make Babe Ruth-style, fence-pointing predictions regarding systems integration, David Hayter, the head of global securities operations at newly merged MFC Global Investment Management, nonetheless made one late last month....

Is Your Firm Socially Networked? Chances Are, It Will Be Soon: Removing the wall between personal and business is risky but potentially profitable.
June 7, 2004... I joined a social network last week. Many of my friends and colleagues were already members, happily referring work to each other, giving advice and otherwise helping one another prosper. The price of admission? I had to upload my Rolodex...

On The Record.
June 7, 2004... Editorial Staff "The most qualified portfolio managers generally want to be professionally challenged. These managers would be inclined to accept positions with hedge funds or similar institutional investor entities where a more...

xBCP: Come Together: Individual projects set stage for futures market's first industrywide test.
June 14, 2004... While much of the attention on disaster recovery in the financial markets has been focused on the equities arena, the futures industry is aggressively pursuing plans of its own. Most prominent of those initiatives is the Futures Industry...

CFTC's Turn to Question SROs.(Commodity Futures Trading Commission and self-regulatory organizations)
June 14, 2004... Armed with a Congressional mandate to modernize U.S. derivatives markets, the Commodity Futures Trading Commission is requesting input from the industry about reforming governance for self-regulatory organizations (SROs) under its jurisdiction....

Great Fund Chairman Debate.(Mutual fund reform proposals)
June 14, 2004... Of all the mutual fund reform proposals on the wish list of Securities and Exchange Commission Chairman William H. Donaldson, the one raising the fund industry's temperature the most might be a requirement that all mutual funds have independent...

IT, Management Failures.(Royal Bank of Canada: service breakdown)
June 14, 2004... The past few days have been pretty awful for the Royal Bank of Canada. A technology snafu left millions of people without access to their money, without their expected payroll deposits and, in some cases, with individual debits being deducted...

Wales Ponders Going Back to the Future.(U.K.)
June 14, 2004... A recently as 30 years ago, the small U.K. nation of Wales had no less than three stock exchanges. They could be found in Cardiff, Newport and Swansea. In fact, if you go a little deeper into the 20th century, you find that U.K. stock exchanges...

Meanwhile, Betting on Canada's Political Future.
June 14, 2004... Not to be outdone by the University of Iowa, which has been operating a futures market linked to the outcome of world events since 1988, nor by all those U.K. betting parlors where you can throw down a few quid on virtually anything, a Canadian...

Issuers Push Direct Communications.
June 14, 2004... Questions about how companies communicate with shareholders holding their accounts in the name of their financial intermediaries have once again been raised-only this time, corporate governance issues are at stake. The influential Business...

Julius Baer Outsources to Northern.(Julius Baer Investment Management)(Northern Trust)
June 14, 2004... Julius Baer Investment Management is outsourcing its U.S. portfolio accounting, reconciliation and cash management to Northern Trust. As part of the deal, Julius Baer and its clients will utilize Northern's Passport platform, which has the...

Instinet Cross Continues Institutional Push.(Block-trading Platform)
June 14, 2004... Instinet has added an intraday cross, IDX, to its continuous block-trading platform CBX in a bid to buck the trend toward small-sized trades-a cause of frustration for many of the company's 1,000 or so institutional clients. With IDX,...

Automated FIX Certification on Horizon.(Society for Worldwide Interbank Financial Telecommunication)
June 14, 2004... The long-anticipated automation of FIX certification for equities might become a reality, if Swift has anything to say about it. The utility is moving ahead with plans to provide electronic certification via the SwiftNet FIX messaging hub....

DTCC Prepares for Both STP and T+1.(Depository Trust & Clearing Corp.)
June 14, 2004... While much of the U.S.' securities industry remains focused on whether straight-through processing or a shorter settlement cycle is the most effective means to reduce risk, Depository Trust & Clearing Corp. appears to have found a way of...

Swift Adding FIX Support for Small Firms.(Swift's order messages)(Society for Worldwide Interbank Financial Telecommunication)
June 14, 2004... Swift, the bank and securities industry messaging utility, plans to roll out what an executive called a "light order entry system" for the SwiftNet FIX service, which will be available on the new SwiftNet IP. The system, which will be...

Who Needs Trade-Through?(securities)
June 14, 2004... With the trade-through debate taking center stage, an academic is questioning whether the quarter-century-old rule still contributes to market quality in the age of electronic trading and firm quotes. But Terry Hendershott, assistant...

TradeWeb Eyes Global, Omgeo Links.
June 14, 2004... The post-merger plans for the Thomson Financial-TradeWeb combo include an aggressive global push into Europe and Asia, an initiative made easier by TradeWeb's shift away from its former multi-dealer, consortium ownership structure, according to...

E-Bond Agenda.(Service Introductions)(Brief Article)
June 14, 2004... Key battle plans of the major e-bond providers this year include supplying interfaces to the soaring foreign exchange market, and cracking the nut of balancing dealer demands for individual broker branding with user requests for single-screen...

Fox-Pitt Highlights Clearing Merger Issues.
June 14, 2004... As it digests UBS PaineWebber's clearing unit, Fidelity Investments' National Financial has seen few correspondents opt for other clearing pastures, as can often occur when broker-dealers face an impending conversion to a new back-office...

Morgan's Fund Plan: Build Instead of Buy.
June 14, 2004... Morgan Stanley plans to build from scratch a fund administration business catering to hedge funds, a self-reliant path it has tended to follow with other initiatives that may run into challenges in the hedge fund world. The firm, one of...

On The Record.(New York Stock Exchange Inc.)
June 14, 2004... "Accustomed to bullying settlements, mistaking bluster for substance, Mr. Spitzer apparently expects I will capitulate to the tune of $18 million. Most people think that simply cutting a check would be the easy way out. Expedient? Sure....

SEC May Choose Registration Lite'.(Securities and Exchange Commission)
June 21, 2004... The summer of uncertainties has descended on advisors managing unregistered hedge funds, as rumors abound about regulators soon proposing a registration requirement under the Investment Advisors Act of 1940. Registration for hedge funds,...

Playing to Type: Predictable industry responses to SEC on STP and dematerialization.
June 21, 2004... The prospect of one-day settlement appears dead in the water while the mandating of same-day affirmation and confirmation is a possibility; so too is dematerialization, albeit not immediately. Such was the well-expected message the U.S....

Lava Hires New Legal Team.
June 21, 2004... Financial software maker Lava Trading has hired a new legal team after suffering an initial but important setback in its landmark patent infringement case against direct-access rivals Sonic Trading and Britain's royalblue Group. "Lava had...

What Summer Vacation?
June 21, 2004... This week marks the official beginning of summer (although, for many in our industry, that line was crossed as soon as SIA Tech wrapped up earlier this month). The summer, of course, has historically been a time when the markets slowed,...

Regulators: Few or Many?
June 21, 2004... The best model for oversight of financial markets is: a) a single, powerful regulatory body; b) a patchwork system of several regulatory organizations; or c) who knows? According to Christine Fay and Nicolas Parent, two academics who...

Part-Time Twilight for ETFs.(ArcaEx)
June 21, 2004... ArcaEx and the Inet ATS last Monday stopped displaying quotes for the three main exchange-traded funds (ETFs) that track the Nasdaq-100 (QQQ), S&P 500 (SPY) and Dow Jones Industrial Average (DIA), if those quotes would lock or cross another...

Quants Group Offers Fund Valuation Tips.
June 21, 2004... The International Association of Financial Engineers (IAFE), a professional group of quantitative analysts, has just released a series of questions investors should ask their fund managers about how their portfolios are valued. The 24-page...

Securities Market Data Providers in Swift.
June 21, 2004... Swift, the banking and securities industry messaging utility, voted last week in its annual general meeting to expand its membership to securities market data providers. The vote was taken among Swift's shareholders, which approved the...

FISD Focuses on Reference Data.
June 21, 2004... XTC, or XML Transmission Compaction, is expected to surface later this summer in the form of an XML toolkit to facilitate the use of the FISDMessage protocol and aid in the standardization of reference data. FISDMessage, along with...

IST Releases XML Payment Kernel.
June 21, 2004... The International Standards Team (IST) has released a standard XML core payment kernel, a payment messaging standard designed to be used by corporate treasurers and banks to exchange payment messages. While a Final Recommendations' report...

Will Market Timing Abuses Move Offshore?
June 21, 2004... On June 1, the NASD ordered Richmond, Va.-based brokerage Davenport & Co. to pay more than $700,000 in fines and restitution for allowing improper market timing in variable annuities. The Davenport case is the first ever brought against a...

Citadel: A Boon for Asset Control.
June 21, 2004... Asset Control's signing of Citadel, one of the world's largest hedge funds, to use its AC Plus data management software package could end up being more than just a financial coup. Although the Beetsterzwaag, Netherlands-based vendor now...

CUSIP's Pricing Policies Come Under Fire Once Again.(Committee for Uniform Security Identification Procedures)
June 21, 2004... The Securities and Exchange Commission's request for comments on improving U.S. transaction processing has opened the door for a U.K. market data management trade group to once again criticize the CUSIP Service Bureau's (CSB) pricing policies....

On The Record.(Brief Article)
June 21, 2004... "I think people should get with the program. We have got to clean up the situation. It's pretty hard to argue that the cost is prohibitive, given the restoration of investor confidence." -Paul Sarbanes, senate Democrat, in response to...

Sources: Senate Wants NMS Hearing.
June 28, 2004... The Senate Banking Committee is likely to hold a hearing on the Securities and Exchange Commission's proposed market structure reform next month and call SEC Chairman William Donaldson to testify, according to industry and congressional...

Actively Managed ETFs on Horizon.(Exchange-traded funds)
June 28, 2004... Actively managed exchange-traded funds (ETFs) might become the next major product offered to the investing community, if they receive the green light from the currently reform-minded Securities and Exchange Commission in the not-too-distant...

What Price Consolidation?
June 28, 2004... While the general fanfare about reducing operational risk and costs relating to clearance and settlement in Europe has been focused on the southern part of the Continent, the Nordic region could quickly grab some attention if the Swedish and...

Standing Room Only.
June 28, 2004... Newspapers are pretty jam-packed these days, what with war news, and political and election coverage from the United States, the United Kingdom, Canada and the European Uunion. A number of sporting events have also dominated headlines,...

For The Record.(Brief Article)
June 28, 2004... In the story Know-Your-Customer Issues for CLS Bank? (Securities Industry News, June 7) the statement, "...non-U.S. settlement members are not required to run the information from their third-party customers through their own Ofac filters" was...

Transfer Agency Plan: Wide Effects.
June 28, 2004... While the securities industry debates a host of options for reducing the number of certificates in circulation, ranging from immobilization to dematerialization, the Securities and Exchange Commission has come up with a idea that has some...

Swift, ISO, UN Seek Message Convergence.(International Standards Organization)
June 28, 2004... The International Standards Organization, UN Cefact and Swift have agreed to converge their messaging efforts, using a UN Cefact-defined unified modeling language (UML) that will be used by all three organizations in creating messages. The...

FIX Group Backs Same-Day Affirmations.
June 28, 2004... Looking at straight-through processing from a standards prism, FIX Protocol Ltd. (FPL) recently aligned itself with many in the industry in its support for same-day trade affirmations and confirmations. In a letter responding to the...

Hedge Fund AML on Tap?
June 28, 2004... With the Securities and Exchange Commission considering a requirement for hedge fund registration, one potential vehicle for overseeing the currently unregulated investment pools-the anti-money laundering provisions of the USA Patriot...

PFPC Enters New World of He.
June 28, 2004... PFPC International's alliance with Beauchamp Financial Technology to white label the technology vendor's FundManager software package to its hedge fund clients worldwide underscores the growing debate within the hedge fund community of the...

Jumping Right In, Still Holding Back: While the Street moves toward open source, key apps stay put.
June 28, 2004... Wall Street firms have been bullish on Linux the past couple of years, moving an increasing number of applications over to the low-cost, easily customizable open-source operating system. In addition, there are open-source development tools...

Open Source On the Desktop Faces Hurdles.
June 28, 2004... Although open source, in the form of Linux, Apache, MySQL and other applications, has become increasingly popular on Wall Street servers, open-source applications still face almost insurmountable hurdles when it comes to the desktops. Some...

A New World of Hedge Fund Services.
June 28, 2004... PFPC International's alliance with Beauchamp Financial Technology to white label the technology vendor's FundManager software package to its hedge fund clients worldwide underscores the growing debate within the hedge fund community of the...

Canada: Passport to a Single Regulator.
June 28, 2004... The government of Ontario, which oversees Canada's largest financial market, has unveiled a plan intended to create a single national securities regulator by 2008. The proposal is intended to kick start the off-again, on-again attempts to...

Suing for Back Taxes.(Brief Article)
June 28, 2004... The merger of Sweden and Finland's depositories isn't the only thing on the minds of local financial institutions. OMHex's members are suing the Swedish and Finnish exchanges, which OMHex owns, to recoup about $25 million in value-added tax...

On The Record.(Brief Article)
June 28, 2004... "Today is independence day for mutual fund investors.... The action taken by the SEC changes the balance of power in fund governance." -House Financial Services Committee Chairman Michael Oxley (R-Ohio), commenting last Wednesday on the...