Robert Gartland, managing director at Morgan Stanley, has a unique vantage point on STP. He's been in charge of global infrastructure for Morgan Stanley's fixed-income division since January 2000. In this role, he works with operations, finance and technology in support of the firm's fixed-income business worldwide. He's also responsible for STP strategies and e-commerce investments.
In 2003, Gartland took on the additional role of chairman of TradeWeb, the dealer-owned electronic-trading platform for fixed-income securities. As chairman, he led efforts to develop STP strategies and tools. In May, TradeWeb was sold to Thomson Financial, which ended Gartland's tenure. At that time, Gartland became a member of the board of managers at Omgeo, the STP joint venture between Thomson and Depository Trust and Clearing Corp.
WS&T Editor-at-Large Ivy Schmerken sat down with Gartland in his New York office to discuss his priorities at Morgan Stanley, as well as the sale of TradeWeb and his new role on Omgeo's board.
Q: What are the top technology projects at Morgan Stanley?
A: We're making a major investment in upgrading our technology infrastructure for our entire business as part of a multiyear investment. About three years ago, we reorganized the fixed-income division into three major businesses: credit products, interest rate and currency products, and commodities. Prior to that, we were organized into eight or nine product silos and our systems architecture reflected that.
Specifically, some of the areas we're focusing on are a new risk-management system, which is much more rich with information and functionality across products. The second area we call straight-through processing for derivatives - both credit derivatives and interest-rate derivatives. And that includes internal efficiencies as well as the ability to leverage some of the newer utilities, such as the DTCC Matching Service, Swapswire and SwapsClear, and other services that are helping promote efficiency in the derivatives market.
Q: What are your biggest challenges?
A: One of the major challenges today is the changing regulatory environment, based on industry things like the Sarbanes-Oxley legislation and the initiative toward a single global-regulator for the industry. All the major securities firms are being asked to appoint a global lead regulator. We're planning compliance with Basel II. So there are a lot of regulatory challenges facing us, which call for even greater degrees of transparency, control and documentation than we've ever had before and [place greater] demands on our infrastructure. Another example ... is some of the recent FASB [Financial Accounting Standards Board] rulings, like EITF [Emerging Issues Task Force] 0203 - it's a FASB interpretation. It clarifies standards for transparency in pricing complex derivatives transactions. ... And a lot of this is all very good for the industry. But a lot of it is a result of some unfortunate things that have happened, like Enron and Worldcom.
I think business also continues to grow in complexity and some of this is facilitated by technology capabilities that we didn't have 30 years ago ... so it really comes down to growth in regulation and complexity in the business. This is challenging for the infrastructure to keep up with.
Ivy is Editor-at-Large for Advanced Trading and Wall Street & Technology. Ivy is responsible for writing in-depth feature articles, daily blogs and news articles with a focus on automated trading in the capital markets. As an industry expert, Ivy has reported on a myriad ... View Full Bio