FlexTrade announces new integration with OTC Link ATS

FlexTrade announces new integration with OTC Link ATS


First Published 14th August 2013
FlexTrade trading & market making functionality integrates into OMS workflows for sell-side clients

Vijay Kedia, president and CEO, FlexTrade
“Our objective is to address trading needs that are not widely available in the market place.”
Great Neck, NY – FlexTrade Systems, the provider of broker-neutral, multi-asset execution and order management trading systems, has announced a complete integration with OTC Link, a wholly-owned subsidiary of OTC Markets Group, to support trading and market making on OTC Link’s SEC registered Alternative Trading System, OTC Link ATS. The new functionality integrates OTC Link ATS’ capabilities into existing broker-dealer workflows for clients using FlexTrade’s sell-side OMS products.
“We now provide OTC Link’s broker-dealer subscribers with integrated workflows that will improve their ability to manage trading in OTCQX, OTCQB and OTC Pink securities,” said Vijay Kedia, president and CEO of FlexTrade. “Our objective is to address trading needs that are not widely available in the market place.”
The new functionality is available in both of FlexTrade’s sell-side OMS products, ColorPalette and FlexOMS. To access the product, customers need to be OTC Link ATS subscribers as the system uses OTC Link’s OTC Dealer IDs for trading access.
“FlexTrade is excited about the opportunity to work with OTC Link ATS’ subscriber market making firms around a new offering,” said Greg Ludvik, director, ColorPalette OMS. “We believe there is a market need for new alternatives to existing third-party solutions.”


NYSE-ATG venture in Brazil aims to bring in new partners

NYSE-ATG venture in Brazil aims to bring in new partners


Americas Trading System Brasil, a joint venture of NYSE Euronext and Americas Trading Group, or ATG, has requested authorisation to begin operations in Brazil, the company said in a statement Wednesday morning.


If approved, ATS Brasil plans to start operations in the first half of 2014, and become the first exchange in more than a decade to compete with BM&FBovespa.

ATS Brasil chief executive officer Alan Gandelman said in interview it expects to have approval from Brazil’s securities and exchange regulator, or CVM, in up to around six months. The company aims to have a 15% share of the Brazilian equity market within two years of starting up.

The value of equities trading on Brazil’s sole stock-exchange operator, BM&FBovespa, hit a record 1.78 trillion reals ($820bn) in 2012.

ATG owns 80% of ATS Brasil. NYSE Technologies, the technology arm of NYSE Euronext, has a 20% stake.


Those stakes will likely change in coming months because ATS Brasil intends to sign as many as eight local and international banks and money management firms as partners to ensure a higher trading volume once the exchange starts to operate, Gandelman said.

The new partners, called liquidity partners, will collectively take an equity stake of as much as 24% in ATS, Gandelman said, noting it hasn’t yet been decided how much ATG’s and NYSE’s stakes will be diluted.

Talks are in an advanced stage and the partnerships with the financial institutions will likely have been decided by the end of July, the executive noted.

ATS Brasil will initially trade only equities and soon after will also offer equities derivatives, the CEO said.


The company could also in future extend its operations to other countries in the region, although currently this is only a possibility, Mr. Gandelman said.

ATG, which provides electronic trading products, was established in 2010 and is already connected to stock exchanges across Latin America, with the exception of Argentina and Venezuela.

ATS Brasil is preparing to enter the Brazilian market at a time of losses for local shares. The benchmark Ibovespa stocks index is down close to 20% year-to-date amid worries about slow economic growth and persistent high inflation. There are also concerns the US Federal Reserve might announce an easing of its bond-buying policy, which could lead to an even stronger US dollar and a reversal of investment flows from emerging markets to the US.

“The outlook for local stocks is not favorable, at least for the next year,” said Joao Pedro Brugger, an analyst at Brazil’s brokerage Leme Investimentos. “In the long run, however, we have a positive view of the Brazilian market and believe it will benefit from having another stock exchange,” Brugger said.


“We believe we are coming to Brazil in an interesting time as we expect investors to come back to the stock exchanges in short or medium term,” Gandelman said, noting that he believes recent losses have been exaggerated.

A few other international companies have shown an interest in entering the Brazilian market, but their plans haven’t yet moved forward.

New Jersey-based Direct Edge Holdings has delayed plans to request an operating license, but says it continues working on it.

One major obstacle to new arrivals is the lack of access to a clearinghouse, where equities trades are processed. BM&FBovespa owns the only clearinghouse in Brazil, but it has said several times it’s not yet opened to the possibility of allowing competitors to use its system.


ATS Brasil has already found a solution to clear its trading without the use of local stock exchange, Gandelman said, though he didn’t give more details on the alternative.

Kansas-based BATS Global Markets and asset management firm Claritas have said they were studying the possibility of launching a competitor to BM&FBovespa, but plans haven’t advanced.

BATS faced problems of its own after announcing that errors on its exchange went undetected for years. According to the company those errors “turned out to be a minor issue, costing customers a total of $17,000 over four years.”

–write to luciana.magalhaes@dowjones.com


This article first appeared in the Wall Street Journal [ http://on.wsj.com/17p74gc ]


What is SEC Rule 15c3-5 — Risk Management Controls for Brokers or Dealers with Market Access?

What is SEC Rule 15c3-5 — Risk Management Controls for Brokers or Dealers with Market Access?


A Small Entity Compliance Guide1


On November 3, 2010, the Commission adopted a new rule to require brokers and dealers to have risk controls in connection with their market access. Rule 15c3-5 is intended to address the risks that can arise as a result of the automated, rapid electronic trading strategies that exist today, and bolster the confidence of investors in the integrity of our markets. Rule 15c3-5 would effectively eliminate the practice known as “unfiltered” or “naked” access to an exchange or an ATS.

Requirement to Maintain Risk Management Controls and Supervisory Procedures

Rule 15c3-5 is applicable to broker-dealers with access to trading securities, by virtue of being an exchange member, an ATS subscriber, or an ATS operator with non-broker-dealer subscribers. Such broker-dealers with market access would be required to establish, document, and maintain a system of risk management controls and supervisory procedures that, among other things, are reasonably designed to: (1) systematically limit the financial exposure of the broker or dealer that could arise as a result of market access, and (2) ensure compliance with all regulatory requirements that are applicable in connection with market access. Specifically, the risk management controls and supervisory procedures would be required to be reasonably designed to:

  • prevent the entry of orders that exceed appropriate pre-set credit or capital thresholds, or that appear to be erroneous;
  • prevent the entry of orders unless there has been compliance with all regulatory requirements that must be satisfied on a pre-order entry basis; and
  • prevent the entry of orders that the broker-dealer or customer is restricted from trading, restrict market access technology and systems to authorized persons, and assure appropriate surveillance personnel receive immediate post-trade execution reports.

Direct and Exclusive Broker-Dealer Control Over Financial and Regulatory Risk Management Controls and Supervisory Procedures

The broker-dealer with market access would also be required to have direct and exclusive control of its financial and regulatory risk management controls and supervisory procedures, with a limited exception that would permit the reasonable allocation of certain regulatory controls and procedures to a customer that is a registered broker-dealer.

Limited Exception for Routing Broker-Dealers

There is a limited exception from the provisions of the Rule for broker-dealers that provide outbound routing services to an exchange or ATS for the sole purpose of accessing other trading centers with protected quotations on behalf of the exchange or ATS in order to comply with Rule 611 of Regulation NMS, or the Options Linkage Plan for listed. These routing brokers would be required to comply with the provisions of Rule 15c3-5 designed to prevent the entry of erroneous orders to help ensure that order handling by an exchange or ATS router would not increase risk to the market.

Regular Review of Risk Management Controls and Supervisory Procedures

Rule 15c3-5 requires broker-dealers with market access to establish, document, and maintain a system for regularly reviewing the effectiveness of the risk management controls and supervisory procedures and for promptly addressing any issues; and no less frequently than annually, conduct a review of its business activity in connection with market access to assure the overall effectiveness of such risk management controls and supervisory procedures and document that review.

The Rule would also require the Chief Executive Officer of the broker or dealer to annually certify that the risk management controls and supervisory procedures comply with Rule 15c3-5, and that such regular review has been conducted. The Rule 15c3-5 CEO certification requirement is a separate and distinct certification from the FINRA Rule 3130 certification requirement; however a FINRA member firm could leverage its current process for compliance with FINRA Rule 3130 to perform the required certification under the Rule. For instance, a FINRA member could combine in the same document the CEO certification required by the Rule with the FINRA 3130 or other required certifications, if the substance of each of the required certifications is contained in that document.

Other Resources

The final adopting release for Rule 15c3-5 can be found on the SEC’s website at http://www.sec.gov/rules/final/2010/34-63241.pdf. The proposing release can be found on the SEC’s website at http://www.sec.gov/rules/proposed/2010/34-61379.pdf.

Contacting the SEC

The SEC’s Division of Trading and Markets is happy to assist small entities with questions regarding Rule 15c3-5. The Division’s Office of Interpretation and Guidance answers questions submitted by email and telephone. You can submit a question by email to tradingandmarkets@sec.gov or you can contact the Office of Interpretation and Guidance at (202) 551-5777.


Rule 15c3-5 will be effective 60 days from the date of publication in the Federal Register in 2011. Once effective broker-dealers subject to the rule will have six months to comply with the requirements of Rule 15c3-5.

CHI-X Canada ATS CX2 successfully completes launch and captures up to 6% market share in key names

CHI-X Canada ATS CX2 successfully completes launch and captures up to 6% market share in key names


Published on   May 29, 2013

Chi-X® Canada ATS Limited, a wholly owned subsidiary of alternative trading venue operator Chi-X® Global Holdings LLC, announced that CX2™ successfully completed its symbol migration of all TSX-listed and TSXV-listed securities on May 21, 2013.

Dan Kessous, CEO, Chi-X Canada commented “We are excited to see our clients reacting to CX2 pricing and features. CX2’s immediate success demonstrates that retail and institutional investors are benefiting from CX2’s unique pricing that rewards liquidity takers and that CX2 is key to reducing the overall cost of trading for investors in Canada.”

Kessous continued “It has been an exciting year for Chi-X Canada. The trading community continues to push our market share to new record highs. We are pleased to report that Chi-X Canada was the only venue to gain market share on a year over year basis in April, rising from 10% to 15% for TSX-listed securities. We remain committed to working with our clients to develop products and services that make trading more efficient.”

Chi-X Canada
“We would like to thank the following vendors for their support and readiness: Fidessa Canada, IRESS Canada, Pico Quantitative Trading, Stockwatch and ThomsonReuters. We look forward to welcoming new vendors over the coming weeks.”

ConvergEx Group upgrades Millennium ATS via new FIX architecture

ConvergEx Group upgrades Millennium ATS via new FIX architecture


Millennium ATS upgrade claims to reduce trade latency by an additional 75%

New York – ConvergEx Group says it has upgraded the infrastructure behind its Millennium ATS to reduce trade latency by an additional 75%.

The upgrade is designed to support the needs of ultra-low latency and IOC customers and includes matching engine optimization and connectivity advancements. The firm is currently in the process of transitioning customers onto the new FIX architecture.

“Millennium is known for its pioneering role in dark pool execution, diverse liquidity and high execution quality,” said Brian Carr managing director and co-head of Sell-Side Services at ConvergEx Execution Solutions. “This upgrade continues Millennium’s long established tradition of excellence and keeps customers at the forefront of execution technology.”

TOM says moves matching engine to London

TOM says moves matching engine to London


Published 20th May 2013

TOM (The Order Machine) said it had migrated its matching engine from Stockholm to cater to growing interest in the UK.

Willem Meijer, CEO, TOM

Willem Meijer, CEO, TOM

“The new standalone setup provides TOM’s clients optimal low latency connectivity and an infrastructure with a higher capacity to process more orders and transactions.”

Amsterdam – TOM (The Order Machine) has announced that its matching engine has successfully been migrated from Stockholm to a new standalone environment in London.

TOM said the move to London will facilitate the growing interest from financial institutions from the United Kingdom in TOM and the increased capacity of the systems will cater for further expansion in Europe in the future. Currently TOM has an overall market share in the Dutch options of 22% and in index options of 32%.

Willem Meijer, CEO of TOM, said: “TOM and all TOM MTF participants worked towards this important milestone. The migration was well prepared and was performed successfully. The new standalone setup provides TOM’s clients optimal low latency connectivity and an infrastructure with a higher capacity to process more orders and transactions.”

CX2 limited open attracts early liquidity

The first week of limited trading on alternative venue operator Chi-X Canada’s second venue attracted liquidity in the ten stocks traded, while new electronic trading rules will have minimal impact on the market, according to Chi-X Canada CEO Dan Kessous. Speaking to theTRADEnews.

via Pocket http://thetradenews.com/news/Regions/Americas/CX2_limited_open_attracts_early_liquidity.aspx May 15, 2013 at 06:55PM

New SEC rules aim to minimise trading errors

The Securities and Exchange Commission (SEC) has proposed new rules that will require operators of trading systems, market data disseminators and some clearing agencies to establish processes to ensure technological stability.

via Pocket http://www.thetradenews.com/news/Regions/Americas/New_SEC_rules_aim_to_minimise_trading_errors.aspx March 18, 2013 at 09:26PM

BLOX-Fidelity Capital Markets, in a departure from convention, is offering to route its customers’ orders for free to its competitors’ dark pools and algorithms.

Fidelity Capital Markets, in a departure from convention, is offering to route its customers’ orders for free to its competitors’ dark pools and algorithms.

With the service, Fidelity is acting in the capacity of a technology intermediary, rather than a broker-dealer. The tack leaves the decisions on how an order should be handled up to the buyside customer.

“A large sophisticated institution with a technology budget would probably do this themselves,” John Donahue, Fidelity Capital Markets’ head of equity, told Traders Magazine. “But 98 percent of the firms don’t have the spend.”

John Donahue

Typically, if a buyside firm wants to be represented in five different alternative trading systems, for instance, he must send out five different orders to the brokers, or pay a single broker to do it for him, Donahue explained. Using Fidelity’s “service bureau,” the buyside sends out just one order, which is then split up and sent to the five systems.

That makes the buyside firm’s workflow simpler, Donahue noted. The approach also allows the institution to maintain its relationships with the five brokers and pay down their chits.

Finally, it allows money managers to “improve their overall execution quality by directly managing those access levels,” according to Derrick Chan, Fidelity’s head of centralized electronic trading, and the architect of the service. That’s something they can probably do better than a broker-dealer, he added.

Fidelity Capital Markets operates an alternative trading system called CrossStream and, in January, launched a new anonymous trading venue designed to help institutional traders find buyers or sellers of large blocks of stock, using retail order flow.

The invitation-only dark pool, called the Block Liquidity Opportunity Cross or BLOX, is an extension of CrossStream.

Although Fidelity doesn’t get paid for routing a particular order, the service adds value and benefits the overall relationship it has with a customer, Donahue said.

The service has been available for two years, but Fidelity is only now actively pushing it. “The service has really taken off in the last few months,” Donahue said. “We are involved in a number of different engagements with some very, very large firms.”

The executive could not say how many shares were being routed under the service because that data doesn’t belong to Fidelity.

NASDAQ OMX taps BondDesk real-time pricing data for new treasury options trading

New York – BondDesk has been chosen by The NASDAQ OMX Group to provide the real-time pricing data needed to support the recently launched options on U.S. Treasuries Trading on the NASDAQ OMX PHLX exchange.

via Pocket http://www.automatedtrader.net/news/exchange-news/142284/nasdaq-omx-taps-bonddesk-real_time-pricing-data-for-new-treasury–options-trading March 06, 2013 at 09:38PM

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