It's About the People: A Look at The SS&C-Advent Deal & HFT's Big Week Ahead

Anthony looks at what the deal will mean for the sell side, and what's to come for HFT this week

Anthony Malakian, US Editor, Waters &

While SS&C's acquisition of Advent will have more impact on the buy side, Anthony says that sell-side firms should still be watching this deal closely.

Last week saw a surprising acquisition as growing-giant SS&C Technologies bought major buy-side solutions provider Advent, which is the proud owner of the Geneva accounting platform and Moxy order-management system.

Yes, this is largely a buy-side story ─ and, specifically, it could have long-reaching ripples for the fund administration sector ─ but it is still a merger that should be watched closely by the sell side, if only to see if there are some top-notch developers and programmers that are looking to jump ship following the acquisition.

A little while back I was talking with a major bank about its systems integration with a recently-acquired firm. The amount of vitriol being spewed toward the inherited family member was palpable. To be honest, a divorce didn't sound out of the question. Nothing amicable here.

While interviewing people for that SS&C-Advent piece, one contact told me about when he was working years ago at a electronic brokerage, after it was bought by a larger bank, the culture clash between the tech-savvy brokerage (which viewed itself largely as a technology company) and the stodgy bank led to a mass exodus of high-quality developers.

"[That] talent drain ultimately decremented the quality of the product," the contact said.

Advent has historically been portrayed as one of those West Coast, fun-loving tech firms, while SS&C has been portrayed as a bit more corporate, in the ilk of a SunGard or Bloomberg. There's nothing wrong with that; it's just that two different cultures can cause friction and eventually attrition, if not handled properly.

The people perspective is something that will play out over the next few years; there are no immediate answers at hand. But whether you're a vendor focused on the buy side or the sell side, while it's easy to look cash flow, the people equation can prove the difference between a brilliant acquisition and sheer stupidity.

Big Week Ahead for HFT, Barclays
This week, on February 11, New York Attorney General Eric Schneiderman will bring his case against Barclays Plc ─ and the bank's alleged use of its dark pool to defraud clients ─ before the New York State Supreme Court in Manhattan. The Court will rule if he can move forward with his suit after amending his complaint.

Back in September, I wrote a full rundown on the Barclays-Schneiderman showdown and the state of broker-operated dark pools, but the gist is that this fight will be the first skirmish in what could be greater market structure battles that could come down the pike...or, in the case of a Barclays win, it could mean business as usual.

My colleague over on Inside Market Data, Faye Kilburn, noted in her recent column that this wave of anti-HFT sentiment has had an effect on the market data complex and trading technologies such as low-latency data feeds, colocation services and microwave networks.

In mid-January Faye sat down with IEX to discuss its "Magic Shoebox", which is a coil measuring in at about 38 miles and designed to add an artificial delay of 350 microseconds for all trading participants at the dark pool. She also spoke with Canada's Aequitas NEO Exchange about its "speed bump" of between 3 milliseconds and 9 milliseconds applied to any high-frequency trading firms that are taking liquidity. Joacim Wiklander, the exchange's chief trading and data officer, even said that Aequitas has plans to "launch a number of ‘disruptive' initiatives to shake-up the market data landscape in Canada, including lower fees and the creation of a Canadian consolidated tape."

It's clear that chess pieces are being moved, though we're still probably just moving a pawn two squares forward. I have no clue how this whole HFT fight is going to play out. I'd imagine that most in the industry are feeling equally clueless. So here we are once more... back to that common theme: regulatory and enforcement uncertainty leads to cautious technology investment.

I'm not saying that this is a bad thing; it's just to say that it is what it is. But who wants to bet that when a new president is sworn in on January 20, 2017, these issues will still be at stake in courtrooms and in the backrooms of most every regulatory body around the globe?

SST Awards...the Deadline Draws Near
The deadline for entering into this year's Sell-Side Technology Awards is February 20 at 6 p.m. (ET), so the clock is ticking.

For the entry, you'll be asked to provide a 500 word description as to why your product should be named the winner in that particular category. I would suggest using real metrics (which can be kept confidential, if requested) and even a case study or true comparisons, rather than a simple description of your product offering, which is information that we could easily find on your website. The submissions that have numbers and examples tend to stand out.

Call me (646-490-3973) or email me at [email protected] if you have any questions.


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