TTW PROFILE

Two trends really. The first is the emergence of electronic communications networks (ECNs) and the need to connect with those ECNs, both equity and more recently fixed income. The second is electronic trade connectivity among brokers, institutions, exchanges, and other sources of liquidity. ECN connectivity falls into this category as well. ECNs are moving from the early adopters to the mass market in the equity markets. There are more than 20 equity ECNs out there, and probably another 30 that are in the registration process.

On the fixed-income side, we are finishing two separate initiatives this month. These efforts involve the domestic US market, but we're looking at working with a firm that will go into the eurobond markets. ECNs are acting as concentrators of liquidity and, as a result, lowering transaction costs associated with trading and. Electronic trading has typically occurred in the most liquid markets. With fixed income, ECNs are seen as a good way to pool up liquidity. Electronic trading will probably help enhance liquidity and price transparency for corporate, convertible, high yield and municipal bonds--products that have traditionally not had the trading volume or size of governments.

We recently completed a global foreign exchange trading system for a client. We also completed an institutional client connectivity architecture for a major Wall Street house.

We are working on buy- and sell-side order management systems. We are also very focused on helping brokerage firms solve their OATS compliance reporting issues. So, whether it's the order audit trail or the proof of best execution, we are in the thick of it.

What will be the biggest challenge that trading room IT managers will face over the coming year, and what kinds of solutions will you be proposing for it?

Multi-product electronic connectivity is the name of the game. Our experience in order management, exchange connectivity, FIX-enabled solutions, and high performance architectures form the basis of solutions which our clients have come to expect of us.

Extremely fast networks in conjunction with exchange consolidation will make instantaneous global trading in multiple products a reality. And the difference between buy- and sellside trader technology requirements is rapidly approaching zero. Can trading room technology keep up as technology-derived securities products proliferate?

There is still not a common view on standards. But the ISO efforts to create a common language between initiatives like FIX and Swift will help considerably. And the industry needs more standardized software components to be able to build and deploy (and retire) applications faster. There's still too much hand tooling of software.

Staff retention and project risk management. Regarding staff retention, a challenge that my peers and I have is competing with the numerous equity plays that are out in the market right now, especially with some of the Internet companies. With project management, Cambridge has a good record on this but we have to find ways to employ component-based approaches to software development. One positive development in this area is middleware, which barely existed four years ago and is now touted as panacea for STP.

A bright spot may be financial application servers--if they can reduce the amount of software that has to be written by hand and manage all the necessary connections such as to Oasys and Swift or with FIX.For example, an interface should be sufficiently abstract to allow me to send a trade message with a FIX tag. The message would be adjusted for the appropriate FIX protocol format and level of my counterparty when sent outside the client's network. That same trade should then also be submitted to Oasysin the Oasys format, again with just a tag indicating it's an Oasys transaction. Then, our developers could focus on proprietary, value-added business logic development.