The Philadelphia Stock Exchange (Phlx) has selected Teaneck, New Jersey-based Cognizant Technology Solutions to implement its decimalization conversion project.
Cognizant will modify code for the exchange's back office business systems and forthe Stock Clearing Corporation of Philadelphia to allow for trading in decimals.The project will be completed and in production by the end of February, ready forthe industry-wide decimalization conversion deadline of August 2000, says MelvaDemmer, vice president of business systems development at the Phlx.
"We think that we are running a little ahead of schedule and will be completed bythe end of February, with the ability to do either fractions or decimals until thefull industry conversion," says Demmer. She explains that the Phlx, which tradesequities, equity options and currency options, chose Cognizant because "the Cognizant team spoke our language, they were very knowledgeable about our businessand the industry." The first round of testing for priority systems will begin inMarch, says Demmer, adding that Cognizant was selected in April and the conversionprocess is already "well under way."
The Philadelphia Exchange was evaluating two other firms for the project, RCGInformation Technology and Computer Sciences Corporation. "We chose Cognizant because of their industry experience and understanding of the securitiesindustry," says Demmer. The Pacific Stock Exchange also used Cognizant for theirdecimal conversion, notes Demmer. Cognizant will revise millions of lines of codein applications for 31 back office sub-systems such as equities, options,surveillance, accounting and billing programs.
Demmer says that the exchange chose to outsource its decimalization conversionbecause most of its IT staff will continue to focus on Y2k-related conversions through the end of this year. "Our staff was pretty well drained and used up andwe felt that to start another big effort such as decimalization was going to betoo much of a strain," explains Demmer. "We determined that the best thing to dowas to contract out and have the code converted externally and use our staff to dothe system testing."