Wall Street Starts Its Holiday Shopping

Now that we're about a week away from Christmas, I've passed a very important personal milestone: For the first time in years, I actually have a solid 28 percent of my Christmas shopping done. Retail shoppers are not the only ones making purchases this week. Global exchange operator Nasdaq OMX plans to pick up FTEN and BNY ConvergEx announced the acquisition of execution management system (EMS) provider Townsend Analytics from Barclays.

Although the Nasdaq and FTEN have gone on the record citing FTEN's low-latency pre-trade risk check function as the reason for the purchase, I feel that it is more about respective footprints. Nasdaq OMX offers FTEN a global presence, allowing it a better chance to expand into Europe and Asia-Pacific. On the other side of the coin, Nasdaq OMX gains a deeply entrenched foothold into the buy side. It the shades of what NYSE Euronext did with its acquisition of Nyfix last year.

ConvergEx's acquisition of Townsend RealTick seems a completely logical way to build out its product portfolio. The company acquired buy-side order management system (OMS) vendor Eze Castle Software awhile ago, and putting RealTick in front of it makes sense.

Both purchases continue to blur the lines between brokers, exchanges and trading infrastructure vendors. Prior to their demutualization a few years ago, the Street would have never seen exchanges directly courting the buy side and potentially disintermediating their sell-side member. But after NYSE Euronext acquired Nyfix and its Nyfix IoInet, the gates have been open. The question now is: Who's next? I can't envision the London Stock Exchange or Deutsche Borse not getting involved in this portion of the market now that two of their US counterparts have.