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SunGard Launches U.K. Broker To Fuel European Expansion

SunGard Global Execution Services targets sponsored access in European markets, DMA and clearing services to high frequency trading firms.

SunGard is becoming a member of all the primary markets and MTFs. Currently, SunGard Global Execution Services is a member of the LSE, as well as the U.K.-based MTFs, including, Chi-X, BATS, Turquoise (recently taken over by the LSE) and Nasdaq OMX Europe. It’s also an active member of NYSE Euronext including the Paris, Amsterdam and Brussels exchanges. It has a pending application for the Deutsche Borse Xetra platform and expects to receive final approval next week. In addition, SunGard started the application process at the Swiss, Italian and Nordic exchanges. Though It can access some of the Nordic markets via OMX, some clients have requested direct access, said Mishoe.

In terms of technology, SunGard will utilize various flavors of its existing platforms. Since the HFT firms require ultra low-latency, SunGard offers to collocate in Europe typically at the exchanges themselves and at other specialists in that area, said Mishoe,

Because of the large volumes from high frequency trading firms flowing over its network, SunGard is able to participate at the highest level of discounts and pass along those savings to clients, said Mishoe.

Clearing is also very expensive and complex in Europe, noted Mishoe. Unlike the U.S. where “clearing is homogenized through the single agency clearing model with DTCC, there are six clearing houses throughout Europe, so the expense is multiplied,” says Mishoe, noting that it could take six trades to fill a 10,000 share order over the various MTFs, so costs are multiplied six times. SunGard chose a general clearing member in Europe that is a member of all six of the leading European central counterparties (CCPs) to provide clearing in a low-cost manner, said Mishoe.

While the sponsored access and high frequency trading market is a new concept in Europe, SunGard had to have many conversations with U.K, regulators and exchanges around pre-and post-trade management, he said, noting that SunGard has the pre-trade risk and post-trade risk management technology required by exchanges and regulators in Europe, said Mishoe. While the SEC is seeking comment on its proposal to ban unfiltered direct access to U.S. equity markets, pre-trade risk management is already mandatory in Europe, noted Mishoe.

“We are one of the first firms to offer sponsored access, DMA and the high velocity DMA in Europe,” claimed Mishoe. We have a model that provides very robust pre-trade and post-trade risk management,” said Mishoe. Overall, SunGard sees an opportunity to use its neutrality as a software company that doesn’t trade for its own proprietary account, operate a dark pool or run a sales desk. “We provide a very neutral and independent offering to execute these trades in driving down their overall cost of business,” said Mishoe.

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

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