BETWEEN THE LINES

After months of explosive growth in the electronic fixed income arena, Tullett & Tokyo Liberty's electronic platform for US Treasuries, Liberty Direct, became the first system to fold. Massive consolidation and the lessening of profit margins in the fixed income marketplace have been cited as reasons why the system was taken down.

Approximately 50 Tullett & Tokyo employees were let go last week, with casualties occurring not only in its electronic business, but in other parts of the organization as well. This move comes on the heels of Prudential's 400-person layoff and announcement earlier this month that it would be closing its institutional fixed-income operations.

Tulllett & Tokyo's fixed-income business will not be closed as Prudential's was, as the company also announced an agreement with Garban-Intercapital to use that firm's ETC trading platform for the execution of US Treasury bills, notes, bonds and zero coupons. The addition of Tullett & Tokyo's estimated $100 billion-per-month fixed-income business to the ETC platform will provide the system with a significant liquidity boost.

Michael Spencer of Garban-Icap says: "This is a powerful endorsement of our trading platform for Treasury products. By adding a share of Tullett & Tokyo Liberty's electronic transaction volume to that already on the ETC platform, our customers will have access to a greatly enhanced pool of liquid-ity in both active and off the run issues."

Electronic fixed income initiatives Bondclick and Prescient Markets added Barclays Capital and ABN Amro's LaSalle Bank, respectively, to their dealer rosters. The addition of Barclays follows Bondclick's announced intention to take all of its development efforts in-house (Trading Technology Week, Oct. 23). The UK-based consortium expects to launch its platform in January.

Many members of Bondclick's IT staff have been hired away from Barclays, including its chief technology officer, Andrew Rowland. Barclays joins ABN Amro, BNP Paribas Group, Caboto Sim, Italian Banca Intessa, Deutsche Bank, Dresdner Bank and JP Morgan. The UK-based Bondclick is expected to continue adding to its roster in anticipation of its launch.

Meanwhile, Prescient Markets has added ABN Amro subsidiary LaSalle Bank to its platform, Cpmarket.com, which specializes in electronic trading of commercial paper products. Since its launch in June, Cpmarket.com has set up accounts with more than 220 financial institutions and has issued over $11 billion in commercial paper through the system.

Worldstreet has selected Savvis to distribute its recently introduced peer-to-peer collaboration platform, Worldstreet Net, across its network of more than 4,700 financial institutions.

Worldstreet Net is an Internet-based, customizable communication vehicle that allows for intelligent, targeted communication between buy-side investment firms and sell-side participants. Filtering features create a tool that allows sell-side participants to decrease the amount of data and news they must sift through to find relevant trade ideas and information.

"Savvis will give Worldstreet the ability to connect our clients quickly," says Bruce Fador, president and chief executive officer. "As the community of Worldstreet Net users expands, we will be able to scale up our reach through Savvis' network."

Jack Finlayson, president and chief operating officer at Savvis, adds, "This is yet another application that attests to our pedigree as the preferred networking services provider to the financial community."

OM Technology has announced that it has been selected by the Oslo Stock Exchange to provide its Saxess system for equity trading. The order, which is worth over $11.9 million, includes delivery, support and operation for five years. Trading within the Saxess system on the Oslo Stock Exchange is set to begin in the fourth quarter of 2001.

Sven Arild Andersen, president of the Oslo Stock Exchange, explains the significance of this selection. "The Stock Exchange Council's approval is the final step in the process of becoming a member of the Norex exchange alliance. When the common trading system is ready for use in a little over one year's time, Norway's exchange-listed companies will benefit from significantly greater exposure in the inter-national capital markets."

"Once the Oslo Stock Exchange starts to use Saxess," says Magnus Karlsson Bocker, president of OM Technology, "between 70 to 80 percent of the volume of shares in the Nordic region will be traded through one and the same trading system."

The Oslo Stock Exchange is actually the fourth exchange to implement the Saxess system. Oslo predecessors include: the OM Stockholm Exchange, the Copenhagen Stock Exchange and, most recently, the Iceland Stock Exchange. Iceland adopted the Saxess system in September for stock and bond trading; delivery was completed at the beginning of October, and trading started Oct. 23.

The Saxess trading system supports a variety of market models, including continuous trading, call markets and quote-driven markets. Saxess provides the tools needed for achievement of high liquidity through its features of combination orders, linked orders, stop loss orders, block orders and balance of orders.

BNY ESI & Co. announced that it has joined forces with Metavante, a middleware provider, to create a trading interface for trust banks. The Metavante/BNY ESI interface will allow trust departments, Metavante's clients, to use BNY ESI's technology to launch US equity trades from Metavante's trust accounting system.

Currently in a beta-test stage, the Metavante/BNY ESI interface offers straight through processing of trade orders and executions through BNY ESI's technology. The orders are first initiated in the Metavante system, then routed to BNY ESI for execution based on user-defined criteria. Finally, BNY ESI automatic-ally transmits the execution information to Metavante, facilitating trade clearance, settlement and client accounting.

The Metavante/BNY ESI interface allows trust departments to manage large volumes of trades by streamlining the trading and settlement process and eliminating the risk of manual errors. Trust departments, then, can still use Metavante's trust systems for accounting and reporting.

"Combining BNY ESI trading with Metavante is an optimal solution for our clients to manage their customers' order flow while they continue to enjoy the benefits of Metavante's richly functional trust accounting system," says Owen Sullivan, president of Financial Services Group for Metavante.

Stephen Shlos, president and chief executive officer of BNY ESI, says: "We are excited about working with the Metavante organization and providing their clients with an automated and efficient trading solution. For trust departments, that translates into better management of staff resources, reduced risk of data entry errors, improved execution quality and better customer service. The impact for clients will be immediate and substantial."

Discussing market trends, Shlos says: "With industry initiatives such as decimalization, T+1 and extended trading hours quickly becoming realities, financial services providers are seeking ways to close the gap between trade processing and customer accounting. The trading interface demonstrates that the bank and its affiliates have taken the lead in providing services today that financial institutions will require tomorrow."