BNS Builds Java-based Platform To Replace Opus

TORONTO--Foregoing the conventional wisdom of buying over building, the Bank of Nova Scotia (BNS) has an in-house developed, Java- and Corba-based, front-end derivatives trading platform that will be rolled out to its London traders starting next month.

The internally developed platform is apparently replacing the Opus platform (originally from Renaissance and now from Infinity) that BNS has licensed since 1993 (Trading Systems Technology, December 13, 1993). BNS officials decline to identify the third-party application that is being swapped out.

BNS decided to create an in-house system mainly for platform independence, and the freedom to make changes to the system on the bank's time frame and to the bank's exact requirements, says M. Arnold Hull, assistant general manager of corporate business development within the technology group of BNS.

"Our intention was to bring the derivatives system in house," Hull says. "We will have a blend of Unix and NT clients."

With an in-house system, BNS' IT staff will have a more flexible and extensible system that "is tailored to our exact needs", Hull says. "We believe that it provides a complete, consistent, sophisticated and integrated product suite. Further, we believe that it will allow us to introduce new products in a much more timely fashion, responding to new market opportunities, and to have a complete end-to-end process when we do so."

The bank has a history of coming up with its own solutions to perplexing problems. In 1995, the bank wrote its own middleware to provide an object/relational link between the Opus objects and its Sybase database (TST, December 11, 1995).

The new system will be used initially for vanilla interest rate derivatives trading but not, as yet, for exotics. The potential exists for BNS to replicate the approach taken with derivatives with BNS' equities, foreign exchange and money markets trading businesses, says Hull. BNS is hoping to re-apply the component architecture for derivatives trading desks throughout the bank, says Hull.

"We will definitely be leveraging off this. We plan to extend it to other, exotic interest rate derivative products, and beyond that to other non-interest rate derivatives," says Hull. "Because of the connective technologies we have utilized, we believe that it could be used across several business areas, allowing internal clients intranet/internet access to our pricing, analytics, and risk management tools."

The new platform consists of a GUI written in Java, the Visibroker object request broker (ORB) from Inprise (originally from Visigenics) and business objects--all using a Sybase database, version 11.5, says Hull who also served as project manager for the 18-month effort. In addition to Java Development Kit (JDK), the developers for the project worked in C++, implemented Sparcworks for compiling and debugging, and deployed their applications for Sun Solaris 2.5.1 with Y2K patches.

Although the Orbix ORB from Iona Technologies was considered, BNS sided with Visibroker because "the ease of the learning curve was very important", says Lincoln Lee, also an assistant general manager at BNS who oversaw the architecture and design of the new infrastructure. "And the Visibroker application appears to have a shorter learning curve," he says.

During the first months of the project, BNS put together a prototype for proof-of-concept, and used it for interest rate swap trading. The team tested the screens, basic functions and hooks to pricing, Lee says. "That showed us what we needed to do," he says.

In late May, the system was rolled out to BNS trading desks in New York, Toronto and Montreal--in all, serving approximately 35 traders in North America. Approximately 10 traders in London will gradually be added to the new platform.

The new Java-based GUI makes use of the new, high-level components of the Java Foundation Class (JFC), dubbed the "Swing" components by Sun Javasoft developers. The JFC software, available since February 1998, extends Sun's original Abstract Windowing Toolkit (AWT) by adding a comprehensive set of GUI class libraries. These components are written in the Java programming language, and facilitate a customizable look and feel without relying on the native windowing system. They also simplify the deployment of applications. BNS developers used the Swing components to build new GUI features such as buttons, text fields, colouring and highlighting--all in response to traders' requests. For instance, the Swing elements were used to build "Spin Control" graphic capabilities that allow traders to navigate up and down the basis points of a yield curve.

In addition, for the widespread usage of Unix on the derivatives desks, BNS still employs the X Windows-based GUI protocol and continues to use some X terminals.

The underlying hardware for the new platform consists of Sun Ultra 5 or Sparcstation 20 workstations used by traders. For the back end, BNS uses two Sun Enterprise 3500 servers. "One 3500 is used primarily for running Riskwatch and the other has Sybase, the Corba servers, and is serving the Xhost for the Xterminals and the low-end Sparcstations," says Lee.

At the same time that BNS was overhauling its derivatives front end it was upgrading its network, Lee says. The bank has upgraded its trading facilities from 10 Megabyte shared Ethernet networks to a 100MB-switched Ethernet LANs.

In other areas, the new derivatives front end allows for data to be extracted from it and into Toronto-based Algorithmics' Riskwatch risk management software, which BNS has had in place since 1995 (TST, December 11, 1995). BNS has built data extraction links between the new derivatives front-end application and Riskwatch. In addition, several Riskwatch functions will continue to run on the desktop, says Hull.

As for other data extractions, the new platform offers between the platform and its Applix Unix-based applications. "We extract some data into the Applix spreadsheets," Lee says. BNS has been an Applix customer since 1995 (TST, December 11, 1995).

At its peak, the BNS development team involved 40 to 50 people with a core of 25 who were involved throughout the 18 months of the project. The first stage of the project took four months for proof of concept and the rest of the project took about 14 months. No consultants were used for the project, say Hull and Lee.