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CBOE, PHLX to jointly develop backup trading; Eurex files to create electronic U.S. futures exchange; FXall signs seven banks.

The Chicago Board Options Exchange (CBOE) and the Philadelphia Stock Exchange (PHLX) announced today they have entered into a memorandum of understanding (MOU) to develop back-up trading arrangements in the event that trading is prevented at either one of the exchanges.

The MOU - approved by both boards of directors - provides that customers and members of each exchange will be able to continue to trade securities listed on that exchange through the facilities of the back-up exchange. Both exchanges will collaborate on the logistics of the back-up arrangement. Final implementation is subject to approval by the Securities and Exchange Commission.

Eurex, the German-Swiss futures market, has filed with the U.S. Commodity Futures Trading Commission to create a fully electronic U.S.-regulated futures exchange. Eurex plans to launch the proposed exchange - Eurex US - on Feb. 1, 2004. The Eurex US trading platform will be two or three releases ahead of what's currently used in the states, says Michael McEarlean, a director of Eurex US, who announced the news in a conference call on Tuesday. The system will be based on the same infrastructure and network as the a/c/e platform, the electronic system used by Eurex's former partner, the Chicago Board Of Trade (CBOT). New functionality will include a strategy building section for creating multi-leg transactions and request-for-quote functionality as well as integration with OTC derivatives markets, says McErlean. Taking direct aim at the CBOT's fixed-income futures products, the new exchange will initially trade futures an options on two, five and 10-year Treasury notes and on 30-year Treasury bonds as well as contracts on the two, five and 10- year Euro interest rates. It will also include European equity index products: futures on the DAX and Dow Jones Euro Stoxx 50 indexes. It will offer 20-hour trading from 8:00 p.m. until 4:00 p.m. the following day.


Seven major banks have signed up for FXall's industry solution for prime brokerage. The banks are ABN Amro, Bank of America, Credit Agricole Indosuez, Dresdner Kleinwort Wasserstein, HSBC, Lehman Brothers and The Royal Bank of Scotland. FXall's prime brokerage functionality will be available through Settlement Center- a standalone application with more than 150 signed customers passing thousands of messages each day. FXall says that banks and their customers will be able to connect to Settlement Center as an industry-standard messaging hub for real-time messaging and automatic notification of prime brokerage deals.


Schwab Institutional, a leading provider of custodial operational and trading support for independent fee-based investment advisors, has joined the SunGard Transaction Network (STN). Advisors that use STN, an electronic global network that provides connectivity to automate trade and post-trade messaging, will be able to send orders to Schwab in real time to achieve straight-through processing. Participants can eliminate the process of phoning and faxing trade information by having trade executions update directly in the advisors' order management systems.


FlexTrade Systems introduced FlexPAC (FlexTrade Point-and-Click), a set of pre-programmed, off-the-shelf execution strategies for real-time trading of portfolios and single stocks. The product is targeted at traders who specialize in algorithmic or rules-based trading, but do not have time to program their own strategies. FlexPAC is comprised of several strategies: FlexBENCH (benchmark of choice), FlexPWAP (VWAP since order placement), FlexRSLICE (random slicing), FLEX TSLICE (time slicing) and FlexLO-IMPACT (low market impact). Once a strategy is selected a trader can apply parameters or constraints

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