Securities Industry News articles from May 2004

Securities Industry News archives from May 2004

Early Returns Are In On Late Trading Plans.
May 3, 2004... Following nearly unanimous opposition to regulators' "hard close" proposal to curb mutual fund trading after 4 p.m. (Eastern Standard Time), mutual fund industry factions are lining up behind alternatives. The late trading solutions, however,...

Exceptions to the Rule: The industry finds new ways to deal with an old processing problem.
May 3, 2004... In a world of true straight-through processing, there would be no need to worry about exceptions, as all transactions would pass smoothly through the pipeline without any manual intervention. However, that's a long way from reality, and firms...

Highway to Hybrid.(Hybrid instruments (Securities))
May 3, 2004... By the end of the year, virtually all U.S. equity and options exchanges will be electronic or hybrid to respond to competition and regulatory reforms. While the New York Stock Exchange is still toiling with its much-advertised proposal to...

Shining a Light on Ops.(Securities Industry Association)
May 3, 2004... This week the Securities Industry Association again holds its annual operations conference. On the surface, there is something almost contradictory about an ops show being held in the warm and sunny climes of Palm Desert. Doesn't the very idea...

Corporate Actions Automation: Hit or Myth?
May 3, 2004... Automating the corporate actions process has been a major thorn in the side of the securities industry's quest for greater efficiency through straight-through-processing initiatives. A lack of uniformity in information and messaging protocols,...

SEC's Market Data Formula: Get Out the Calculators.(Brief Article)
May 3, 2004... In its Regulation NMS, the Securities and Exchange Commission is proposing to alter the market data revenue formula to better reward exchanges that quote actively and to discourage rebate-driven practices. Some market participants, however,...

Coming Soon: Inet Exchange?(Electronic Communications Network )
May 3, 2004... Instinet Group is considering turning its Inet ATS-which commands one-fourth of Nasdaq volume-into an exchange, as impending reforms may yield a regulatory landscape less friendly to ECNs. "If we believe it is in our shareholders' interest...

EC: Level the Playing Field.
May 3, 2004... In its long-awaited strategy document on European clearance and settlement, the European Commission last week appeared to side with a group of European central banks and securities regulators in recommending broad regulations based on a...

ISMA Calls for Repo Matching.(International Securities Market Association)
May 3, 2004... In the wake of increased repo volumes in Europe, the European Repo Council of the International Securities Markets Association, the European fixed-income trade group, is urging member firms to match the second leg of bilateral repo transactions...

Cost Looms Large in FIXML Debate.
May 3, 2004... Cost continues to be the issue that can start or stop a migration from one standard to another. It is often less about the technology and more about the willingness of an installed user base to take down what works in favor of something else...

Options Payment for Order Flow Ripped.
May 3, 2004... While the broad Regulation NMS reform has attracted much attention lately, the Securities and Exchange Commission is also tackling important market structure issues related to competition in the fragmented but linked options world. The SEC...

Broker-Dealers Down Under Take Regional View.(Securities and Derivatives Industry Association)
May 3, 2004... In keeping with the industry's increasingly global outlook, Australian investment managers and brokers should focus on more markets in their own time zone, according to David Horsfield, chairman and CEO of Australia's broker-dealer and...

Electronic Fixed-Income Trading: Room to Grow.
May 3, 2004... Participation in electronic fixed-income trading is increasing exponentially, creating more liquid markets and spurring the leading platforms to invest greater amounts of time and money in innovation, according to panelists at the Bond Market...

LSE's Sedol Masterfile Could Boost MDDL.(London Stock Exchange PLC introduces market data definition language or market identifier codes called Sedol codes )
May 3, 2004... With vendor support for the market data definition language (MDDL) still slow to develop, the London Stock Exchange's March rollout of its Sedol Masterfile initiative could provide a major jumpstart for the emerging standard. As part of...

Disclosures: Transparency or Money Pit?
May 3, 2004... How the Securities and Exchange Commission will weigh the comments of nearly 2,700 individual investors against 160 or so industry players-on the Commission's proposal to heighten mutual fund point-of-sale and confirmation disclosures-is a...

On The Record.
May 3, 2004... "We'll buy votes if we have to." -Mary Matalin, political consultant and keynote speaker, at the options industry's annual conference on April 24, when asked whether the Republicans could lose control of the Senate in the November...

Merrill's Vatsa: Achieving T+1 One Step at a Time.
May 3, 2004... When the Securities and Exchange Commission recently came out with its concept release seeking industry comment on an array of topics ranging from straight-through processing to a shorter trade settlement cycle, it once again highlighted the...

Nasdaq: Back in Black.
May 3, 2004... Nasdaq last week reported a first-quarter profit of $4.6 million, up from $2.6 million for the year-earlier period-the last quarter before Robert Greifeld took over as CEO and president. In the closing quarter of 2003, Nasdaq had reported a...

Dueling with Stats: In an effort to sway the SEC as it mulls reforms, markets trot out conflicting statistics.
May 10, 2004... As the Securities and Exchange Commission mulls crucial reforms, markets are touting various execution statistics to sway regulators in favor of their business model. "Careful studies, using a range of methodologies including...

An Active Trader's View.
May 10, 2004... David Cummings, armed with a computer engineering degree from Purdue University, built his IT-powered proprietary trading firm, Tradebot Systems, in 1999 and has since developed it into one of the leading "black box" liquidity providers. ...

CFTC Eyes Off-Exchange Trades.
May 10, 2004... In a move highlighting its reach in the off-exchange electronic trading arena, the Commodity Futures Trading Commission has won a preliminary court injunction barring a Web site called Enetspeculation from soliciting U.S. investors. ...

EU Super Regulator Needed.
May 10, 2004... On May 1st the European Union underwent a major expansion as it welcomed 10 eastern European and former communist nations to the fold. For the record, those joining the existing 12 members are: Poland, Hungary, the Czech Republic, Slovakia,...

Risk Often Overlooked in Offshoring.
May 10, 2004... Investment banks have placed significant financial bets on the short-term cost savings associated with offshore outsourcing. Following the rampant trend to outsource back-office functions to offshore locations, many investment banks (e.g., J.P....

Want an Ops or IT Job in Asia-Pac? Read On.
May 10, 2004... Those thinking about a job in the back-office or IT department of a major financial shop in Hong Kong or Singapore may want to reconsider after they tap into an online bulletin board known as IceRed. The Internet site, created by Hong Kong...

SEC May Put Onus on Intermediaries.(Securities and Exchange Commission)
May 10, 2004... At least one member of the Securities and Exchange Commission skeptical of the so-called "hard 4 p.m. close" for mutual fund orders is actively scouting for "characteristics" to build an alternative, and trade groups are stepping up to provide...

Hong Kong to Trial Paperless Market.
May 10, 2004... In yet another example of the global trend toward dematerialization, the Hong Kong Stock Exchange (HKEx ) will introduce a scripless model for share ownership based partly on proposals first put forward by the Securities and Futures Commission...

FIX Faces critical mass issue on buy side.
May 10, 2004... Buy-side firms continue to drag their heels in adopting FIX, limiting its potential to bring a raft of benefits to the industry. Cost of implementation is one factor holding firms back. Meanwhile, inconsistency in the deployment of the standard...

Offshoring Advice: Talk Less, Do More.
May 10, 2004... As the debate over outsourcing rages, firms should focus on the savings Offshore outsourcing has become the polarizing economic debate of our times. Discussions are taking place in state and federal legislatures, on television and in...

China Starting to Look Good for Outsourcing.
May 10, 2004... Last fall, Boston-based Bain Capital Ventures needed a database to track its investments. It was a job just right for one of Bain's portfolio companies, E5 Systems. The fact that E5 did most of the actual development work in China wasn't a...

Inside the Secret Weapons: Hedge Fund Execs Talk Strategy.
May 10, 2004... Hedge funds-those unregulated investment pools that target the very wealthy- are nothing if not secretive. Largely exempt from securities laws, they operate under the radar and like it that way. The best hedge funds, which can charge...

MDDL Pushes Exchange Envelope.(Market Data Definition Language)
May 10, 2004... The Market Data Definition Language's stealth advance on the exchanges continues, as it has begun discussions with the Tokyo Stock Exchange and Deutsche Boerse. Sources with the Financial Information Software Division (FISD) of the...

EU Officials Push for Post-Trade Standards.
May 10, 2004... In an update last week to its 19 proposed operating standards for providers of clearance and settlement services, a joint working group of the European System of Central Banks and Committee of Securities Regulators has acquiesced to some of the...

On The Record.(Brief Article)
May 10, 2004... "This is the kind of language one would expect the Fed to use when it is ready to hike rates." -Larry Kantor, global head of economics and market strategy at Barclays Capital, commenting on the Federal Reserve's policy statement following its...

Time's Up?(securities)
May 17, 2004... Resolving the issue of how to curb market timing trades appears to have taken a backseat to efforts aimed at eliminating late trading, as the regulators and industry groups hash out solutions for the latter. However, a recently issued rule...

Power to the States In Reg NMS Debate.
May 17, 2004... As states reassess their investment strategies in the wake of financial scandals, the Alabama Senate this month passed a resolution urging the Securities and Exchange Commission to repeal or reform the controversial trade-through rule. "We...

Defining Directed Brokerage'.
May 17, 2004... Not all directed brokerage is created equal. In fact, confusion about what is actually meant by the term "directed brokerage" can create serious misunderstandings, and lead to different conclusions about the value of the practice. In the...

New Regulations: The Never-Ending Story.
May 17, 2004... At the beginning of a session on mutual funds processing and regulations at the Securities Industry Association's Operations Conference in Palm Desert, Calif. earlier this month, the panelists laughed at the idea of even attempting to cover all...

Trade-Through: A Rule In Search of a Reason.(Online securities trading)
May 17, 2004... The recent Baruch College conference on "Electronic vs. Floor-Based Trading" might as well have been titled "Electronic vs. Floor-Based Trade-Throughs," such was the passion invested in the debate over the famous rule's possible demise....

Standardizing the Standards: The Industry's Certification Efforts Past, Present and Future.
May 17, 2004... Some time this year, the industry can expect to see the first steps being taken toward certifying the market data definition language (MDDL), the XML-based standard that was designed by the Financial Information Software Division of the...

Citi, ADP Eye Clearing Growth.(Citigroup Inc.)(Bank of America BrokerDealer Services (BofA BD))
May 17, 2004... Citigroup has taken an early step toward creating a correspondent clearing business by hiring a top executive from Bank of America BrokerDealer Services (BofA BD), which has been tainted by its role in enabling problematic mutual fund trading...

Clearstream, BondCom Take Action'.(Clearstream International)(Bondholder Communications)
May 17, 2004... International depository Clearstream and Bondholder Communications have teamed up to create an automated corporate actions notification and processing service for global debt reorganizations and restructurings. Bondholder Communications, a...

Ireland Next in Pershing's Expansion Plan.
May 17, 2004... Setting the stage for its European expansion, Pershing, the clearing subsidiary of the Bank of New York, has nabbed two outsourcing clients in the Irish market-brokerages Goodbody Stockbrokers and Bloxam Stockbrokers, bank officials said. ...

CFTC May Harmonize FCM Capital Rules.(Commodity Futures Trading Commission and futures commission merchants )
May 17, 2004... The Commodity Futures Trading Commission could soon implement a long-awaited risk-based approach for determining the minimum capital requirements for futures commission merchants (FCMs), about a year after the idea of changes was first floated....

Closing Cross Gains Backing.(Brief Article)
May 17, 2004... In an important endorsement for the electronic market, Russell Investment Group will use Nasdaq's newly launched closing cross to price Nasdaq stocks during Russell's annual realignment of its 21 U.S. stock indexes on June 25. "Nasdaq's...

Big Board, SEC Talks: The Other Market Debate.
May 17, 2004... While Regulation NMS is drawing much attention, the market structure debate may get settled over less publicized negotiations between the staff of the Securities and Exchange Commission and the New York Stock Exchange. The discussions...

The Man Who Changed the Street.
May 17, 2004... When he set out to challenge an obscure regulation five years ago, Matthew Andresen had little idea he would spark today's intense market debate and prompt the mighty New York Stock Exchange to reconsider its model. "We had never heard of...

CFTC OK Augurs New Global Competition.(Commodity Futures Trading Commission )
May 17, 2004... LCH.Clearnet has won approval from the Commodity Futures Trading Commission to clear exchange-traded futures and options contracts in the United States, paving the way for a new era of global competition between clearinghouses. The CFTC's...

On The Record.(Investment management)(Brief Article)
May 17, 2004... "Regulators need to cut through the fog and shine a light on investor costs and broker compensation." -NASD Chairman and CEO Robert Glauber, on May 12, at the NASD spring securities conference in Baltimore "The judge reached figures...

Paper Chase Heats Up: Industry groups push exchanges on direct registration for certificates but hurdles remain.
May 24, 2004... In the latest step aimed at stemming the torrent of paper stock certificates, the Securities Industry Association is in talks with the New York Stock Exchange, American Stock Exchange and Nasdaq to require listed firms to offer what is now...

NYSE Still Mulling Direct+ Stops.(New York Stock Exchange )
May 24, 2004... The New York Stock Exchange is close to finalizing a revamped proposal to boost its auto-execution capability, a crucial step in the transformation of the last major floor exchange into an automated or fast market, industry sources said. The...

Redemption Plan Unredeemed.
May 24, 2004... Unlike recent polarizing regulatory proposals, the Securities and Exchange Commissions plan to require redemption fees on certain mutual fund trades in order to curb market timing abuses reveals an industry with many solutions to a common...

Consistency Amid Turmoil.(economy)
May 24, 2004... After 17 years as the nations top banker, Alan Greenspan is hardly without his critics. Particularly of late, as many Wall Streeters worry that the Feds insistence on keeping short-term interest rates low will lead to creeping inflation. In...

With New Trading Technology, Is Hearing Really Believing?
May 24, 2004... The offices of Accentus are the same as so many tech startups, filled with more optimism than furniture. To succeed, the company will have to transform or, more properly, augment, the way traders take in critical information. They will move...

NYSE Could Be E-Bond Sleeper.(New York Stock Exchange)
May 24, 2004... The Big Board is looking to ramp up its electronic bond offering, a quiet service of corporate, government and municipal bonds listed on the exchange and available for automated sale and purchase. That format is exactly what many in the bond...

Fidelitys Policy: One Second or Else.
May 24, 2004... In the latest example that certainty of execution and speed go hand in hand, Fidelity Investments is guaranteeing to execute trades of 100 to 500 shares in any S&P 500 stock at the national best bid/offer within one second of receiving that...

Mellon Girds for European Expansion.(Mellon Trust Global Securities Services)
May 24, 2004... Mellon Trust has licensed Global Investment Systems Mshare software as part of a broader push into the increasingly competitive European transfer agency arena. The GIS package is now replacing a system known as Cobas from Scottish Computer...

Bank of Bermuda Targets Hedge Funds.
May 24, 2004... The Bank of Bermuda, recently bought by HSBC, has expanded its relationship with SunGards Reech unit to customize and rebrand its RiskHedge software product into a risk management engine for the banks clients. Launched in January 2002, the...

Futures and Options Biz Embraces FIXML.
May 24, 2004... The move to FIXML in the futures and options industry that was initiated last year by the Options Clearing Corp. has led to a full-blown migration that has already drawn in the Chicago Mercantile Exchange, the Chicago Board Options Exchange,...

Data Battles Ongoing But Inconclusive.(financial markets)
May 24, 2004... In the war for market data desktop dominance, there have been some skirmishes, battles and client wins so far this year but it is difficult to call a clear winner yet. Reuters, Bloomberg and Thomson Financial are all scrambling for business...

Algorithms Mean More Options, But Perhaps Not for Traders: Artificial intelligence.
May 24, 2004... Algorithmic trading should grow to encompass 50 percent of securities order flows, according to Richard Balarkas, global head of advanced execution services at Credit Suisse First Boston (CSFB). For an artificial intelligence researcher, thats...

On The Record.(securities trading)
May 24, 2004... The proposal would extend the trade-through rule to the Nasdaq market. We question why, when there have not been problems regarding price protection, the rule should be imposed on the Nasdaq market. John Giesea, president and CEO of the...

SEC Offers Clues About Reg NMS Progress.(Securities and Exchange Commissions)(National Market System )
May 24, 2004... Annette Nazareth, Securities and Exchange Commissions director for market regulation, gave a glimpse of the direction the Regulation NMS debate is headed, in remarks before the Securities Industry Associations market structure conference last...

DTCC Expands Access to Information.(Depository Trust & Clearing Corp)
May 24, 2004... The Depository Trust & Clearing Corp. has consolidated and expanded access to corporate actions and reference data collected by its depository subsidiary, the Depository Trust Co., into an online service known as Smart/Source. The new offering,...

Fast vs. Slow: Industry weighs options for reconciling electronic and manual venues.
May 31, 2004... Thomas Peterffy, founder and chairman of Interactive Brokers Group (IBG), might have provided the Securities and Exchange Commission with the key to accommodating electronic and manual markets within one regulatory framework. "We would...

Processing Standards No Easy Task for EU.
May 31, 2004... While European Union watchdogs remain steadfast in their goal of creating a safe and efficient post-trade clearing and settlement environment by setting guidelines for service providers, the second draft of the ESCB-CESR's proposed standards...

BCP Tests Part of New M.O.(business continuity planning)
May 31, 2004... While improving communications remains the key challenge to business continuity planning, and a better understanding of how to successfully direct staff during large-scale evacuations is needed, this month's terrorism drill provided the latest...

Switching Course in the U.K.
May 31, 2004... Is the U.K. regulator going soft? The draconian measures for dealing with soft commissions and bundled stockbrokers' fees that the Financial Services Authority proposed last year have been abandoned and the industry told to devise its own...

Crossing the Channel: London, Euronext Target New Markets.(London Stock Exchange PLC )
May 31, 2004... After months of maneuvering and posturing, the battle between the London Stock Exchange and Euronext was officially joined earlier this month as both exchanges took steps to poach some of the other's prime business. In the United Kingdom,...

Deutsche Boerse-LSE Once Again?(London Stock Exchange PLC)(Brief Article)
May 31, 2004... Four years after failing in their attempt to merge, the Deutsche Boerse and the London Stock Exchange are again exploring the possibility, according to U.K. sources. Over the past few weeks Deutsche Boerse CEO Werner Seifert has met with key...

Nasdaq Strikes Back With Brut Deal.
May 31, 2004... Nasdaq, which has been struggling for months with a declining market share, has bought some much-needed maneuvering room with its $190-million all-cash acquisition of Brut, the second-largest ECN. The deal, announced last week, will leave...

Andresen Joins Citadel.(Matthew Andresen at Citadel Investment Group )(Brief Article)
May 31, 2004... Matthew Andresen, an advocate of reforms to modernize U.S. capital markets, is joining Chicago-based hedge fund Citadel Investment Group as president of execution services, according to industry sources. Andresen and Citadel were not...

Swiss OK Paves Way for EU Tax Plan.
May 31, 2004... The recent agreement between the European Commission and the Swiss government on the reporting of interest income earned by European Union residents has smoothed the path for a January 2005 implementation of the EU Savings Directive-and with...

BBH Offers New Option for Swift Link.(Brown Brothers Harriman)
May 31, 2004... Brown Brothers Harriman's acquisition of Syllog, a Swift Service Bureau provider, allows the global custodian to expand its reach in the communications outsourcing arena for fund managers by offering another alternative in linking to the Swift...

CME, Reuters Commit to FX Automation.(Chicago Mercantile Exchange Inc.)
May 31, 2004... Heralding the spread of automated foreign exchange trading, the Chicago Mercantile Exchange has agreed to make its electronic forex (eFX) market data available on Reuters terminals in a spot-equivalent format. The CME says it wants to...

PCX Faces Last Demutualization Hurdle.
May 31, 2004... The Pacific Exchange is readying for a final regulatory hurdle before demutualization, an essential part of its future strategy. The California Department of Corporations will hold a hearing on June 9 in San Francisco to ensure the...

Regional Hubs Drive Brokers in Asia.
May 31, 2004... In yet another example of necessity as the mother of invention, Asia-Pacific broker-dealers are developing a variety of hub solutions depending on which aspects of the trade and settlement cycle in particular markets are centralized or...

In Offshore Outsourcing, Firms Move Well Beyond Processing:Morgan, Fidelity leading.
May 31, 2004... In the race to move business processes offshore, big financial services firms are pointing the way not only for their smaller counterparts, but also for the rest of American industry. And their strategies suggest rapid growth in outsourcing...

What to Say When Lou Dobbs Calls.(time with William Bierce on outsourcing practices)(Interview)
May 31, 2004... With jobs still scarce, and a presidential election in November, the outsourcing phenomenon has emerged as a kind of political third rail, with a powerful backlash uniting to oppose it. One of the most outspoken critics of offshore outsourcing...

Reg NMS Revisited.(national market system )
May 31, 2004... Based on the industry's input at an April hearing, the SEC is considering amending its initial Regulation NMS proposal in a number of key areas: Fast and Slow Quotes vs. Markets Reg NMS proposed an exemption to the trade-through rule...

BofA Clearing Sale Approaches Finish.
May 31, 2004... The fate of BofA BrokerDealer Services (BofA BD) and U.S. Clearing appears to be firming up. Bids from prospective buyers are due Friday, and the parent bank will likely make a decision shortly thereafter, according to sources. Those...

On The Record.(quotes)(Brief Article)
May 31, 2004... "We see this as the first time one of the market data cartels has taken a step to [benefit] investors. We would like the SEC to consider the Nasdaq proposal." -Jeffrey Brown, SVP at Charles Schwab, speaking at the SIA market structure...