Real Time Accounting Means Rough Sledding For Fastrade

Fastrade, a trade reporting, deal capture, and position-keeping system for equities dealing in the U.K., is now being offered to OTC market makers in North America. But reports from Fastrade users in London suggest that Logica is either moving too fast with the new product, or not fast enough.

Logica PLC, a UK-based software and systems consultancy, is making a strategic push into the production and marketing of internally- funded software "kernels", and Fastrade is among its first. At $450,000 (250,000 sterling), rights to Fastrade do not come cheap.

Originally developed with U.K. market maker Phillips and Drew, Fastrade is currently running on a total of 160 screens at three London market makers including Morgan Grenfell and Drexel Burnham Lambert. Its main functions are trade reporting and price entry to the stock exchange, and position-keeping and P&L for all trading books.

Fastrade was written in two languages, COBOL and PL/1 -- the report side in the former and the online processing side in the latter. Because of the reporting requirements of London market makers, response time and screen refresh rate were given high priority during development.

It is installed only on Stratus minicomputers. According to Peter Ross, Fastrade project leader at Drexel in London, up to 60 users can be supported on one Stratus 2100, provided there is no development work and a limited number of custom modules.

The screen is split between a multiple page position-keeping section which occupies the upper four-fifths of the monitor, and a trade, price, or limit-alert entry form which occupies the lower portion.

The positional section is a simple listing of securities, prices, and average book cost trading positions. Trades can be entered directly into the electronic ticket at the bottom of the screen. Of course, there's no guarantee that all trades will be entered.

Drexel, a worldwide licensee of Fastrade, was promised delivery of a FIFO accounting module in late summer. The requirement for the FIFO module came from Drexel's New York offices.

The module has yet to be installed. "We're very unhappy with their work on these extra modules," says Steve Edkins, securities development manager at Drexel's London operation.

"It was a lot more complex than anyone realized, but we've behaved very ethically towards Drexel and stuck by our original quote. We've really taken it on the chin," says Harvey Gritzman, Fastrade sales manager at Logica.

One FIFO online accounting module isn't the end of the world, but apparently other North American-based multinationals have expressed an interest in similar FIFO accounting capabilities for profit and loss calculation. "In hindsight, I think it was a bad decision," says Drexel's Edkins. "We were asked to supply the front end with profit and loss calculations both for accountants and for traders. I question the requirement for online accounting P&L on a front office system."

The bright side of Fastrade's U.K. track record is the experience Logica support staff have gained in dealing with a hostile communications environment.

Most of the problems Drexel experienced were communications problems. Phone lines in the City come and go without warning or explanation, and Logica has developed a British Telecom-proof telecommunications design which should easily withstand the worst that New York Telephone can offer.

Nonetheless, Logica will have its hands full developing a communications interface with NASDAQ for its first North American customer.