Enterworks and Internet Trading Technologies, Inc. (ITTI), are integrating Enterworks Process Integrator (EPI) into ITTI-s Universal Trader trading system to give Universal Trader enhanced functionality that will be critical in a future T+1 settlement environment.
The new enhanced trading system will allow buy- and sell-side institutions to better know the location and condition of a trade throughout the settlement cycle, allow both market makers and brokers to set limits on client activity to minimize risk, and ensure that trades are processed in accordance with SEC regulations.
"If we can provide them users value in understanding where their transaction sits in the life cycle through execution and through confirmation, then we-re providing them with some additional value that we feel is not represented anywhere in the marketplace," says ITTI Chief Operating Officer Russell Lewis.
Setting thresholds for a market maker means accepting only a certain amount of exposure to a brokerage firm, while setting thresholds for a broker means permitting limited amounts of exposure to a client. Similar to staying in line with a mutual fund mandate for fund managers--such as being notified when a conservative fund is overly weighted with high-flying technology stocks--brokers or financial advisors will be notified when thresholds are approached by their clients--they can then contact them proactively.
Additionally, recent SEC regulations establishing order routing criteria have established certain parameters that executing venues must function within. "To be able to fully explain the order routing criteria and have that automated and those rules not only well-established in your software but defensible is one of the things that we are looking at this product to help us do," says Lewis.
ITTI-s Universal Trader is private-labeled to execution venues that then decide which of their constituent buy- or sell-side firms have access to the system, with venues paying a monthly and transactional fee for the service. "Some of these guys don-t play well in the sandbox together, so it-s up to them executing venues to decide who gets this additional service," says Lewis.