September 4, 2006 Issue Abstract

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Buy-Side Technology Trends: Advancing Trading Support Is a Top Priority As Institutional Investors Re-Think Their Business. Developing advanced support for electronic trading, becoming technologically prepared for the increasing globalization and flattening of exchange trading, and introducing standardized application interfaces are at the apex of a growing pyramid of challenges confronting asset management firms.

Industry Alert: 2006 Pension Protection Act Sharpens LDI Data Focus. With the ratification of the Pension Protection Act of 2006, investment management firms’ cost-reduction efforts may accelerate, pushing more outsourcing of back-office services.

Exchange Competition: Regional Exchanges Pose Bigger Threat Than Dark Pools. Even as alternative trading venues tout their abilities to tap “dark pools” of liquidity, good portions of US equities liquidity are dropping from the New York Stock Exchange (NYSE) and Nasdaq – but not to these venues, rather to regional exchanges.

Spotlight: Laurent Clamagirand, Chief Operating Officer, AXA Investment Managers.

Focus on Data Latency: Arms Race Over Milliseconds Drives Data Management. Recognizing that milliseconds matter, securities and investment firms and hedge funds are seeking IT solutions to act on market data virtually as soon as it is generated on exchanges where trades are executed. The increased importance of speed is driving technologies that can position traders virtually at any exchange.

Plan Sponsor Perspective: PERSI [Public Employee Retirement System of Idaho] Managers Get Flexibility of Independent Checks. PERSI operates in a state with good control over its liabilities, with statutes that allow the plan to set its own contribution rate. Consequently, the importance of a solid working relationship with its global custodian is important and one of the reasons PERSI has maintained returns over benchmark levels and kept risk low.

Regulatory Compliance: Trading-Data Solutions Are Aimed at Mutual Funds. Networking for Standardized Data Reporting, a new service within the banner of the Networking service offered by the Depository Trust & Clearing Corporation, will coordinate client-level information with brokers’ data on trades and portfolios, therefore identifying breakpoint discounts to which the clients are entitled.