Wall Street Letter VOL. XLVI, NO. 7 - July 2014 | Page 11

JULY 2014

said the company has more than 1,800
firms on the system, so there are quite
a few more to go.
“Most of the rollout will get done
this year but some of it will go into
next year,” he said. Because different
firms have different training needs, the
rollout strategy will allow Pershing to
work through training processes appropriate to each user firm. “Typically
anywhere from six months to a year is
what it takes,” he said.
Pershing will continue to make the
previous version of NetX360 available
in parallel even as it gets more users on
to the system, Nagappan said. While
there is no set point in time at which
the company plans to take the older
version of NetX360 offline, he noted
it will happen at some point when the
majority has made the switch.
NetX360, which offers access for
professionals into trading, data,
reporting and other capabilities, has
been updated with a new interface and
navigation, enriched data presentation
and dashboards, and global search capability, among other enhancements.
EXCHANGES & ATSs

ISE to reference
underlying to
determine some
quote differentials
The International Securities Exchange
(ISE) plans to adjust its quote differential requirement for market makers
quoting options series that are in-themoney, according to a June proposal
to the SEC.
Specifically, it plans to require
market makers to base their quotes
on the bid-offer differential of the national best bid or offer for the relevant
underlying security.
According to its existing rules, ISE’s
requirement is that quotes be submitted with a differential of no more than
$5 after the opening rotation. The
exchange allows an exception in situa-

tions where the spread for the underlying stock is greater than $5 in order to
offer more flexibility – in these cases, it
requires market makers to rely on the
bid-offer differential of the stock at the
primary exchange.
Now ISE said it wants to change
that exception to rely on the bid-offer
differential of the underlying stock
based on its NBBO.
“The exchange believes that measuring the permissible width of a market
maker’s quote against the NBBO more
accurately reflects the current trading
environment where multiple trading
venues contribute to the prevailing
market price of a security underlying
an options series traded on the ISE,”
it said.
Using the NBBO as the reference
for the quote differential may also
result in a tighter spread for the option series, which ultimately benefits
investors and maintains flexibility for
market makers, ISE noted.
TECHNOLOGY

REDI considers
novel asset class
expansion
REDI Technologies, which was spun
out from Goldman Sachs and now
provides broker-neutral trading
systems, will consider asset class
expansion over the next two years as
the vendor begins to hire staff for an
acquired office in Dallas, Texas, according to Rishi Nangalia, who spoke
to WSL.
The New York City-based vendor
of execution management systems
has been scouting the market for what
asset class to break into next based on
client needs and which asset classes are
becoming more electronic, according
to Nangalia.
“REDI is global multi-asset class
offering and our capabilities are a reflection of what our clients need,” said
Goutam Nadella, chief product officer.
“A lot of the hedge funds leverage

multiple platforms, from vendors to
banks, for execution of FX trades. Our
clients trade forex primarily on bank
platforms and that has been a trend
for a while. We’ve never been asked,
but the market is currently heading
electronification similar to the equity
markets.”
While FX seems to be the most
likely choice, Nangalia pointed out
that other classes being looked at are
bonds and corporate debt functions
and have hired a consultant to aid in
the process.
“FX is most conducive to being on
an EMS like ours, which means that
it is a logical choice, but it does not
mean that this is the asset class we
end up going with, as this depends
on the opportunities in the space and
what our clients ask us to do,” said
Nangalia.
REDI’s acquisition of Bank of
America Merrill Lynch’s InstaQuote
business entails the vendor taking on
30 new staff members and an office
that can hold 60 people, where another
30 people will be brought in with
expertise in sales, support and IT, according to Nangalia.
“We saw a team that has deep
experience in the electronic space that
we service and considering we focus
on the execution management space,
there were synergies between the two
companies, said Nadella. “When we
talk of growing from 30 to 60 people
in that office, we are planning on
hiring not just from a technology perspective, but we are hiring on a client
service basis as well.”
TECHNOLOGY

AlgoFast looks to
add broker partners
AlgoFast, a Chicago-based provider of
event trading software, is looking to
add more brokerage partners this year
as it ramps up the latest iteration of the
offering, according to Justin Bouchard,
CEO.

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