Latest Articles


Error in Singapore Forced Unwinding of 110,000 Trades
The Singapore Exchange recently faced the same operational risk consequences as the Tokyo Stock Exchange and others in having deal with the aftermath of a miskeyed order.
Securities Industry News Feature (August 2007)
Is China Too Hot to Handle?
An average of 300,000 new brokerage accounts for investing in mainland equities and mutual funds were opened daily in the second quarter of this year, according to official statistics. By the end of June, retail brokerage accounts totaled more than 105 million. On some days, investors opened as many as half a million new accounts.
Waters Feature (August 2007)
Competition Looms
Alternative trading systems and crossing networks for equities are ramping up their presence in Asia this summer and while the exchanges are not likely to feel the searing heat of competition just yet, they would be wise to heed these harbingers of fragmentation.
Waters Feature (July 2007)

Citi, FTSE Bring Indexing to Vietnam
Not every security in Vietnam is open to foreign investors, but there are enough to make for an index. Citigroup and FTSE Group teamed up to launch the country's first equity index for foreign institutional investors on May 22.
Securities Industry News Feature (June 2007)

Liquidnet Trying to Blaze Asian Trail
Not If, for alternative trading systems and electronic communications networks, Asia is the final frontier, then Liquidnet wants to be the civilizing force. Except for a few big brokerages that match customers' orders internally in Japan, such as Credit Suisse and UBS, and a recent push by agency brokerage Instinet, much of Asia is uncharted territory in terms of alternative, automated equity trading venues, and demand for them is mounting.
Securities Industry News Feature (June 2007)
Hidden Dragon
For five years, starting in 2001, the Chinese stock market headed down. Investors pulled out their money; brokerages went bankrupt. Then the Chinese government instituted a series of far-reaching reforms and the market started to rebound, quickly regaining the territory it had lost, and hitting record highs.
Waters Feature (June 2007)
DTCC Signs MOU With Chinese Counterpart
Depository Trust & Clearing Corp. of New York and its Chinese counterpart, the China Securities Depository & Clearing Corp., have signed a memorandum of understanding, launching formal cooperation in areas of information exchange and "projects of interest," the companies said last week after sealing the agreement June 8 in Beijing.
Securities Industry News Feature (June 2007)

Asia's Alternatives
In many respects, Asia has been following the U.S. and European lead on matters of market structure and regulation as Asian laws and technologies steadily edge closer to the world standards developed elsewhere. With the recent spate of memorandums of understanding among Asian exchanges, not to mention those between these regional markets and others in the West, Asia may be following a similar path of exchange consolidation as well.
Securities Industry News Feature (May 2007)

Competitiveness Move: Japan Looks to Merge TSE, 3 Other Markets
In Members of Japan's Council on Economic and Fiscal Policy, the country's top economic policy body headed by Prime Minister Shinzo Abe, met last week to discuss combining four exchanges to make the country's markets more competitive internationally.
Securities Industry News Feature (April 2007)
China Puts Foreign Securities Firms on Hold
The China Securities Regulatory Commission (CSRC) has said that it will issue no new licenses to brokerages set up as joint ventures with foreign firms until the country's market reforms are completed. In a Sept. 13 statement, the agency gave no indication of when the ban will be lifted.
Securities Industry News Feature (September 2006)

TSE, in Trading Upgrade Step, Nears Vendor Selection
The Tokyo Stock Exchange (TSE) finished accepting bids this month to rebuild its troubled trading system and is preparing to select a vendor by year-end. The exchange did not disclose the names of the candidates; full implementation is planned for 2009.
Securities Industry News Feature (September 2006)

Broker-Exchange Battle Goes Global
The U.S. pattern of stock-exchange consolidation, which has recently spawned a flurry of new investments by market participants in alternative or smaller trading venues, is repeating itself on two continents. Just as NYSE Group and Nasdaq Stock Market are integrating acquisitions and looking to Europe for expansion while competition is stirring at home, new industry-backed ventures are mounting challenges to the dominant Australian and U.K. exchanges.
Securities Industry News Feature (September 2006)

Is XBRL a Solution Searching for a Problem?
Securities and Exchange Commission chairman Christopher Cox, who took office more than a year ago, has been an unabashed promoter of extensible business reporting language (XBRL) as a standard for business data reporting. Yet to date, only 24 U.S. corporations have adopted it for their SEC filings. More use it overseas, but the technology, touted by advocates as a boon for financial reporting, research and analysis, is still on an uphill climb.
Securities Industry News Feature (September 2006)

NMS Compliance Requires More Monitoring, Archiving
The Securities and Exchange Commission is requiring full industry compliance with Regulation National Market System (NMS) by next May, and many Wall Street firms are scrambling to install monitoring and archiving technology to meet best-execution and related documentation requirements. "It's a lot of work," said Howard Lazar, director of the equity IT division at Credit Suisse. "This has been our number-one project for equities IT for 2006 and into 2007."
Securities Industry News Feature (September 2006)

IHigh-Tech Chinese Province Attracts U.S. Exchanges
In 1986, New York Stock Exchange chairman John Phelan visited China and met with leader Deng Xiaoping. In 1997, Chinese president Jiang Zemin returned the favor, coming to New York and ringing the opening bell--a gesture repeated in 2004 by Premier Wen Jiabao.
Securities Industry News Feature (September 2006)

China faces labor shortage, rising wages
A plentiful supply of cheap labor, mostly rural migrant workers, has been one key force driving China's rapid economic growth in the past two decades. A comparative advantage in labor costs has turned the nation into a global manufacturing center and furniture-making powerhouse.
Furniture Today Feature (August 2006)

India Remains a Hot Spot for Brokerage Outsourcing
About a year ago, call center employees of Bangalore-based Mphasis tricked Citibank customers into giving out their personal identification numbers, then used the codes to steal more than $300,000. By August, Indian police arrested three former employees of Mphasis, an outsourcing provider recently acquired by Electronic Data Systems Corp.
Securities Industry News Feature (July 2006)

China, Japan Futures Markets Cooperate on Weather Derivatives
The Dalian Commodity Exchange (DCE), China's largest agricultural commodities futures exchange, and the Tokyo Financial Exchange (TFX), Japan's only financial futures exchange, have agreed to jointly develop weather derivative products for trading on both markets.
Securities Industry News Feature (July 2006)

CME Expands in Asia With Yuan Derivatives
In August, the Chicago Mercantile Exchange (CME) will introduce three derivatives based on the Chinese yuan; in June, it opened an office in Hong Kong to serve as its Asian business hub.
Securities Industry News Feature (July 2006)

Dubai Mercantile Exchange To Open in Fourth Quarter
The Dubai Mercantile Exchange is on track for a fourth-quarter launch that will make it the first international energy futures exchange in the Middle East, according to its chief executive, Gary King. It will operate from a trading floor now under construction in the Dubai International Financial Center (DIFC), and its first product will be an Oman crude oil futures contract.
Securities Industry News Brief (July 2006)
Blogging for Alpha
The more crowded and competitive the hedge fund industry gets, the more difficult it is for fund managers to set themselves apart from competitors. The above-average returns that might come from developing unique, technology-based trading strategies are harder to come by. Curiously, one answer to this problem may come from a technology that in a few short years has become decidedly mainstream: Web logs, better known as blogging.
Securities Industry News Feature (June 2006)

Bridging the Chinese Skills Gap: Despite vast numbers of IT graduates, suitable talent is hard to find
Hankscraft Inc. has been making industrial motors and mechanized pumps for more than 50 years in Reedsburg, Wis. The company came to China just three years ago but already has twice as many employees here as it has at home. Jonathan Funkhouser, who is general manager of Hankscraft's China operations and who makes the top-level technology decisions, thought it was going to be hard to get all the government approvals he would need in order to set up shop in China. But that turned out to be the easy part. "Finding good employees and managers was the most difficult," he says.
Computerworld Feature (June 2006)

Technology Meets Derivatives Trading
Hedge funds tend to trade complex products such as credit derivatives far more frequently than do other buy-side firms, and many of these trades are still executed manually. Many are customized and negotiated individually, which limits the potential for automation--and makes them susceptible to errors.
Securities Industry News Feature (June 2006)

Outsourcing Moves Out of the Back Office
In the back office, pretty much everything that can be outsourced has been outsourced. Now hedge funds are looking to find more operational efficiencies and are casting a critical eye on other functions, while prime brokers, fund administrators and others are looking for new opportunities to provide services.
Securities Industry News Feature (June 2006)

When Lifestyle Determines Location
A visitor to central Massachusetts would perceive Worcester as a nondescript, somewhat faded industrial town, a far cry from a financial capital. But that's where you'll find Cutler Capital Management, a five-person hedge fund with $33 million under management, primarily convertible securities, real estate investment trusts and dividend-paying equities.
Securities Industry News Brief (June 2006)

Six Steps to Picking the Right Vendor
As the competitive and regulatory environment for hedge funds grows ever more complex, so does the process of picking prime brokers and fund administrators. "A number of hedge funds would probably say that the services they receive from their partners--prime brokers or administrators--are not always up to par," says Boris Onefater, national hedge fund director at Deloitte & Touche. "If you call 500 hedge funds, probably only half of them are going to be completely satisfied with the services they receive." And as additional functions are outsourced, more of them are exposed to operational risks beyond the funds' control.
Securities Industry News Feature (June 2006)

Smart Searches Find Their Way to Wall Street
The more information sources available in electronic form, the more difficult it becomes to sort through and make them truly useful. The issue is being addressed by a number of recent product introductions from search technology companies.
Securities Industry News Feature (June 2006)

ABN Amro in Chinese Futures Venture
Netherlands-based ABN Amro has established the first joint-venture futures brokerage in China in a partnership with China Galaxy Securities Co. of Beijing, the country's biggest brokerage in terms of assets.
Securities Industry News Feature (June 2006)

OMX To Upgrade Middle East Exchanges
In two separate deals announced last month, Stockholm-based exchange operator and technology vendor OMX will be building a new trading platform for the Tadawul stock market in Saudi Arabia and upgrading the trading systems at the Dubai Financial Market (DFM).
Securities Industry News Brief (June 2006)

Chinese IPOs To Return From Yearlong Break
The China Securities Regulatory Commission (CSRC) announced May 17 that it would permit a resumption of initial public stock offerings after a year of hiatus while major market reforms were put in place. The CSRC also revised its listing requirements and procedures.
Securities Industry News Feature (June 2006)

Foreigners Find Chinese QFII Quotas Stifling
Foreigners are, if anything, more eager than they were a few years ago to invest in China's booming economy, but they are still running up against the strict market-access quotas of the qualified foreign institutional investor (QFII) program that the government introduced in 2003. Out of 40 firms that have obtained QFII status from the China Securities Regulatory Commission (CSRC), 34 are operating under investment quotas imposed by the central-bank-affiliated State Administration of Foreign Exchanges (Safe).
Securities Industry News Feature (June 2006)

Schwab Moves to Two-Factor
Aiming to both keep pace with competitors and keep fraud, phishing attacks and identity thefts at bay, Charles Schwab & Co. said it will be deploying a set of information security products including a two-factor authentication device.
Securities Industry News Feature (June 2006)

ABN Amro Fortifies Compliance Searches
Dutch banking giant ABN Amro has put in place a compliance system with a high-tech search feature designed to improve information gathering for 400 compliance officers worldwide. The system's key feature is a Web-based portal that the bank calls Galileo, which scans unstructured content including regulations, legal files, internal documents, video, audio and e-mails for meaning and context.
Securities Industry News Feature (April 2006)
Search Technology Gets Smarter
As the volume of information coursing through securities firms continues to expand, so does the need for search engines capable of anticipating and producing more relevant, targeted results than those of currently available software. With an assist from artificial intelligence that delves deeper than would a conventional keyword search, technology developers are getting closer to that ideal.
Securities Industry News Feature (April 2006)
Phishers Sink to New Lows
They are the scourge of the Internet--anonymous armies of programmers who send out masses of spam, set up fake Web sites and take money from unwitting holders of online banking and brokerage accounts. In the bargain, they can turn personal computers into spam-manufacturing zombies.
Securities Industry News Feature (April 2006)
Security as a Selling Point
In January, E-Trade Financial Corp. did something that no other brokerage had done: It promised to cover all customer losses due to online fraud. Charles Schwab & Co. followed suit in February, putting these firms in the vanguard of trying to raise customers' comfort level with an added layer of security technology.
Securities Industry News Feature (April 2006)
Reuters Delivering YouDevise Trade Ideas
Reuters Group announced last week that it is the first vendor to distribute the Trade Idea Monitor (TIM) system that youDevise of London developed for brokerages to transmit trading suggestions to buy-side and money manager clients.
Securities Industry News Brief (April 2006)
Japan Opens Up to Foreign Technologies

As the forces of automated and algorithmic trading spread to Japan, the country's brokerage industry is throwing off its historical insularity and investing in technologies invented elsewhere, principally the U.S., where advanced trading and related compliance and support systems developed first.
Securities Industry News Feature (April 2006)

Web Services Require Streamlining, Governance
For the last few years, securities firms have been hearing the siren song of Web services: the promise of a world where the lingua franca of extensible markup language (XML) and ready-made computing frameworks like IBM Corp.'s WebSphere and Microsoft Corp.'s .Net overcome old problems of system incompatibility and enable pieces of software code to be reused and deployed efficiently across the enterprise.
Securities Industry News Brief (April 2006)
Citi Brings Securities Services to Vietnam
Continuing its aggressive expansion in the Asia-Pacific region, Citigroup's global transaction services (GTS) unit has brought its custody and clearing services business to Vietnam. Anticipating significant growth, Citi had already offered securities trading and corporate cash management to Vietnam, but the addition of the new services as of Feb. 28 gives the New York banking company a stronger presence in the country's growing capital markets.
Securities Industry News Feature (March 2006)
Outsourced Operations Dodge Philippine Turmoil
The recent state of emergency in the Philippines did not affect the Wall Street firms with operations in the island nation, including Morgan Stanley, JP Morgan Chase & Co. and Merrill Lynch & Co. But the securities industry's interest in the country as an outsourcing destination may decline slightly as a result.
Securities Industry News Feature (March 2006)
Search Technology Gets Smarter
As the volume of information coursing through securities firms continues to expand, so does the need for search engines capable of anticipating and producing more relevant, targeted results than those of currently available software. With an assist from artificial intelligence that delves deeper than would a conventional keyword search, technology developers are getting closer to that ideal
Securities Industry News Brief (March 2006)
Citigroup Brings Its Securities Services to Vietnamese Market
Continuing its aggressive expansion in the Asia-Pacific region, Citigroup's global transaction services (GTS) unit has brought its custody and clearing services business to Vietnam. Anticipating significant growth, Citi had already offered securities trading and corporate cash management to Vietnam, but the addition of the new services as of Feb. 28 gives the New York banking company a stronger presence in the country's growing capital markets.
Securities Industry News Brief (March 2006)
Automation on the Rise in China
China may be the low-wage manufacturing capital of the world, but not every company comes here to save money on labor.
Managing Automation (Mar 2006)
Reporter's Notebook: Contending with China's Supply Chain Challenges
Immature infrastructure, geographic scale, and cultural differences can make supply network management a struggle, but like anything else in business there is no gain without some pain, according to execs attending a recent forum in Shanghai.
Managing Automation (Mar 2006)

Tokyo Earmarks $27 Million for Hardware
In one of its first tangible investments to improve its tattered infrastructure, the Tokyo Stock Exchange (TSE) plans to spend more than JPY3.2 billion ($27.3 million) to upgrade its order-handling capacity by May.
Securities Industry News Feature (February 2006)

H&R Block Tries a New Anti-Fraud Tool
There have been two main ways to protect online brokerage operations from fraud: with back-office systems that track transactions and detect anomalies that might indicate money laundering, for example; and with intrusion-detection and -prevention systems that guard against Internet hackers.
Securities Industry News Feature (February 2006)

Getting the Chinese Bond Market In Gear
Italy's MTS tries to kick-start effort to export European fixed-income expertise
Securities Industry News Feature (February 2006)

Valuation Becomes Tricky
While many hedge funds now have to register with the Securities and Exchange Commission, the SEC is still leaving funds to their own devices when it comes to valuing their portfolios.
Securities Industry News Feature (February 2006)

Regulators Go Paperless
The Securities and Exchange Commission used to be choking on paper, but technology changed all that.
Securities Industry News Feature (February 2006)

China's Exchanges Pave Way for Adopting XBRL
The Chinese securities industry is not the place to look for hot performance. According to Bloomberg, the Shanghai and Shenzhen composite indexes have been the world's worst-performing stock benchmarks since 2001. But in one area, these two exchanges are breaking new ground: the use of the extensible business reporting language (XBRL) for corporate filings.
Securities Industry News Feature (February 2006)

Enterprise IM Vendors Start to Play Nice
Instant messaging is a compliance nightmare for securities firms. When people pick their own screen names, it is hard to tell who's sending the messages. It's almost impossible to figure out who's receiving them. Archiving and monitoring messages requires third-party solutions from specialized vendors like IMLogic of Waltham, Mass., which was recently acquired by Cupertino, Calif.-based Symantec Corp., and Facetime Communications of Foster City, Calif.
Securities Industry News Feature (February 2006)

As Voice and Data Merge, Archiving Gets More Complicated
Combine Internet telephony and cheap storage and you get the ability to store virtually all of your telephone conversations. But with that comes the responsibility to deliver those conversations to regulators or courts if they demand it. "Voice retention can be a double-edged sword if it's not accompanied by retrieval technology and employee training," says Kevin Kalinich, professional risks solutions director at Aon Corp., a risk management consultant and insurance company based in Chicago.
Securities Industry News Feature (February 2006)

Fujitsu Out, Hitachi In at Osaka Exchange
The Osaka Stock Exchange (OSE) confirmed last week that it is in the process of replacing its old Fujitsu trading system with a platform by Hitachi.
Securities Industry News News (February 2006)

NYSE's Star Matrix System Adds Tools for Examiners
Upgraded productivity tools at the regulatory arm of the New York Stock Exchange promise to save its examiners time. Some of these tools may ultimately be offered to member firms as well.
Securities Industry News News (February 2006)

Learning From the Elders
Moscow's stock exchange, the Russian Trading System (RTS), made a rookie mistake last week. It made access to its trading software available over the Internet so that outside developers could work on an upgrade, but the testing platform wasn't fully and securely isolated from the main network. A virus got in and overloaded RTS computers with bogus messages. None of these messages got through to the live trading system, but their sheer volume overloaded the network and the exchange had to be shut down.
Securities Industry News News (February 2006)
Tullett Prebon Is First Money Broker in China
Tullett Prebon, the interdealer brokerage unit of U.K.-based Collins Stewart Tullett, has become the first money broker in China by opening a joint venture with Shanghai International Trust & Investment Corp. (Sitico). Although the business has gotten off to a slow start since it launched in December, company executives and competitors are poised to join the fray.
Securities Industry News News (February 2006)

New Trade Idea Dissemination System Launched
In October, youDevise, a London company specializing in on-demand technology applications for financial markets, introduced Trade Idea Monitor (TIM), a Web-based system that lets brokerages disseminate trading ideas to buy-side and money manager clients. Already claiming a considerable following among major brokerages, hedge funds and other asset managers in the U.K., youDevise unveiled TIM for the U.S. market on Feb. 1.
Securities Industry News News (February 2006)

Chinese XBRL Data On the Way
Supporting the Chinese markets' push into the automated future, Edgar Online said it will be the first U.S. financial information company to deliver fundamental data on Shanghai Stock Exchange (SSE) and Shenzhen Stock Exchange (SZSE) issues in extensible business reporting language (XBRL) format.
Securities Industry News Feature (January 2006)

Held to account
A growing number of Chinese firms pick western accountants to put their books in order, but better regulation is the key to rooting out the fraudsters.
China Economic Review (January 2006) Free registration required.
Troubled Tokyo Stock Exchange Appoints CIO
Taizo Nishimuro, acting CEO of the Tokyo Stock Exchange (TSE), named a new chief information officer last week and promised to double technology spending to overcome the market's recent operational and capacity problems.
Securities Industry News News (January 2006)
Chinese New Year Gestures: Regulatory Reforms
The start of the new year brought sweeping reforms to China's securities industry, beginning with three new rules issued by the China Securities Regulatory Commission (CSRC)--the first of more than 40 expected within a month and designed to raise regulatory oversight and investor protections closer to industrial-country standards.
Securities Industry News News Feature (January 2006)
A Chinese First: Brokerage Goes Bankrupt
As China's secondary financial center, the southern city of Shenzhen has helped to lead the country's fitful drive toward free markets. Last week it blazed a different, though still pioneering, trail as the location of the first bankruptcy in the Chinese brokerage sector.
Securities Industry News News (January 2006)
Chinese XBRL Data On the Way
Supporting the Chinese markets' push into the automated future, Edgar Online said it will be the first U.S. financial information company to deliver fundamental data on Shanghai Stock Exchange (SSE) and Shenzhen Stock Exchange (SZSE) issues in extensible business reporting language (XBRL) format.
Securities Industry News (Jan 2006)
Troubled Tokyo Stock Exchange Appoints CIO
Taizo Nishimuro, acting CEO of the Tokyo Stock Exchange (TSE), named a new chief information officer last week and promised to double technology spending to overcome the market's recent operational and capacity problems.
Securities Industry News (Jan 2006)
Chinese New Year Gestures: Regulatory Reforms
The start of the new year brought sweeping reforms to China's securities industry, beginning with three new rules issued by the China Securities Regulatory Commission (CSRC)--the first of more than 40 expected within a month and designed to raise regulatory oversight and investor protections closer to industrial-country standards.
Securities Industry News (Jan 2006)
A Chinese First: Brokerage Goes Bankrupt
As China's secondary financial center, the southern city of Shenzhen has helped to lead the country's fitful drive toward free markets. Last week it blazed a different, though still pioneering, trail as the location of the first bankruptcy in the Chinese brokerage sector.
Securities Industry News (Jan 2006)
RFID Comes to China
While Chinese manufacturers and the Chinese government must come to terms on standards, this burgeoning industry is poised for growth.
Managing Automation (Jan 2006)

Tokyo Stock Exchange Closes Early
The problem-plagued Tokyo Stock Exchange (TSE) had to shut down again today as trading volume piled up faster than computer systems could handle it.
Securities Industry News (Jan 2006)
Photonics priority in Korea
Public-private partnerships drive photonics ahead in South Korea.With China and other emerging countries quickly becoming more technologically competitive, South Korean companies could face losing customers to this new competition.
SPIE Professional (Jan 2006)