Now that SuperMontage has been launched, has anything really changed? From the perspective of the end user, their trading world seems much the same. One broker/dealer goes as far as to describe the entrance of SuperMontage as a "non-event." He explains that although work had to be done by programmers to prepare for the launch, it didn't significantly impact the way traders execute their trades. A money-management firm agrees, noting that it hasn't been a big deal, other than prompting the firm to sway a bit more toward using ECNs than it had in the past.
If this sampling is representative of most financial-services firms' experiences since the launch of SuperMontage, then why all the commotion?
Celent Analyst Sang Lee suggests that although nothing has drastically changed yet, just wait. SuperMontage, he contends, will build momentum throughout the year. He goes as far as to say that, "ECNs as we know them in the past are more or less dead."
In preparation, the industry has been giving ECNs a lot of advice. One source noted that ECNs should buckle down and become "lean, mean, fighting machines" in order to remain competitive in a world with SuperMontage. Another one suggests that ECNs not rest on their laurels, rather they must think about their business plan and decide if they are going to be merely electronic-execution platforms or electronic broker/dealers. Yet another suggests banning together - joining forces with other ECNs and attaining exchange status to stay in the game.
In this supplement, we try to drill down into the issue and give you a taste of the ECN/SuperMontage landscape as it stands now, as well as how some perceive it will be in the future. Our first story is an overview of the evolution of ECNs and how they have become more diverse. The second story offers insight into how some of the end-user firms have responded to the launch of SuperMontage and the third provides information on the major players in the ECN marketplace, illustrating what SuperMontage is up against.
The jury is still out as to which has the strongest future or if ECNs and SuperMontage can both thrive.