Traderforce Open Publisher Cuts Vendors Out of Contributions

French data terminal vendor Traderforce has developed a means for broker-dealers to be able to communicate their own prices to buy-side firms—with client-specific margins where required—using the vendor's terminals.

The new service, dubbed Traderforce Open Publisher "enables anyone to publish any kind of data within a network—not just the Traderforce network—and disseminate it peer-to-peer to end users," says Traderforce chief executive Jean-Michel Blanco. "The idea is … to enable the financial community to share proprietary data without needing contribution solutions from vendors."

The advantage of this, he says, is that the data never actually passes across a vendor's data platform or central database before reaching the intended recipient, thus remaining confidential, meaning that prices intended for specific customers are not seen by other firms.

"We feel that the added value of a bank should stay within the bank and its clients, whereas vendors can take a contributed price and do whatever they want with it—for example, create a composite best bid and offer," he says.

Sell-side firms could use the service to distribute prices with tailored spreads, margin requirements, research, security lending deals data and indications of interest for OTC trade offers, Blanco says. "It means that so long as the dealer uses an underlying ticker [symbol], they can send out prices, and a client can respond and trade over-the-counter using the same Traderforce/ FlexTrade platform that they use to trade listed equities via FIX," he says.

If a client was using the Traderforce front end, these notifications would appear like a news headline alert on the platform with the logo of the firm that the message is from. Open publisher could also be used by buy-side firms to notify internal staff of confidential portfolio allocations data, he says—in which case the message would contain a link to a data file stored on the firm's intranet.

However, clients do not need to use the Traderforce front end, so long as they have their own Microsoft .Net-compatible front end to display the results table, he says, and a publishing server installed on their premises with a .Net plug in to extract and normalize the data and propagate the data into tables for their users.

Blanco says the service is the result of three years' development, partly in preparation for dealing with the upcoming MiFID regulations in Europe. He says that while internalizers and multilateral trading facilities will have to make quotes more widely available, they will still be able to differentiate prices according to different clients. "The whole community will need a system to publish different kinds of prices… while not wanting clients to see the different spreads they are providing," he says.

"My understanding is that a firm can publish different quotes with different spreads for different sizes of orders, but that where the size of order is the same then the quotes should be the same," says Chris Pickles, manager of industry relations at BT Radianz and chairman of the Mifid Joint Working Group. "We should also remember that quotes are likely to be different between a data dissemination environment and the firm's own electronic trading platform, due to the structure of the underlying technology and intrinsic differences in latency between different systems architectures," he adds.

Blanco says that three large international banks are testing Open Publisher with pilot clients, but declines to name the banks.