June 9, 2008 Issue Abstract
The Electronic Marketplace: Multi-Asset Trading Convergence Stays Elusive Goal Stymied by Liquidity, Valuations, Manual Processes. Although the advance of technology continues to percolate beyond equities into other asset classes, including options, coordinated and efficient side-by-side electronic trading of multiple asset classes may be a long way off. Standing in the way are fragmentation of liquidity, connectivity challenges, poorly automated post-trade processes, and valuation problems across asset types and securities.
Industry Alert: Goldman, Morgan, UBS Algo Links a Small First Step? Plans to access each other’s “dark pool” liquidity announced by Goldman Sachs, Morgan Stanley and UBS on May 20 address limitations of fragmentation in the marketplace, but also open a door to future technological co-operation among the three in areas where there could be cost savings.
Hedge Funds: Funds Find Prime Brokerage Service Levels Lagging. As hedge funds give more business to prime brokers, using their services more often, and driving up prime brokerage revenues to about $11 billion in 2007, 15 percent greater than in 2006, they are also seeking better service levels than what previously passed muster.
Spotlight: Stephen N. Potter, President, Northern Trust Global Investments. NTGI is widening the cross-border aspect of its investment approach, under investment strategies that use an array of internally managed products and multiple manager solutions to expose clients to well-researched work by boutique “alpha generators.”
New Product Roundup:
Tackling Liquidity Pools, Derivatives, Hedge Funds, Risk.
A roundup of noteworthy new technologies, including some being featured
at this year’s Securities Industry and Financial Markets Association
Conference and Exhibit in
Securities Trading: Financial Executives Remain Wary of Trading Fraud. Another shoe could still drop following on the multi-billion euro trading loss suffered due to fraud at Société Générale in January, according to a survey of major large trading firms in North America and Europe.