News Retrieval

Paul Honey, First VP of Global Contingency Planning, Merrill Lynch Chairman of the SIA Business Continuity Planning Committee

Q: What book are you currently reading?

A: When Every Moment Counts: What You Need to Know about Bioterrorism from the Senate’s Only Doctor by Senator Bill Frist, MD.

Q: Where do you go to relax?

A: I have a darkroom in my house for developing and printing black and white film--very quiet, very dark and very peaceful.

Q: If you retired tomorrow, what would be your dream plan?

A: All day playing with my two sons, James and Edward.

Q: What was the last gadget you bought?

A: Canon S9000 photo printer--amazing toy.

Q: What Web site do you read during lunchtime?

A: BBC News - www.bbc.co.uk

Reeling from higher-than-expected losses, Reuters plans to slash its product and service lines by approximately half while developing a new IP-based platform. Reuters posted a pre-tax loss of £88 million ($140 million) and is withdrawing more than 500 products and services out of approximately 1,000 offerings.

Most will be country- and region-specific market data content products rather than technology products, says a Reuters spokesperson. They include Valuscope, Reuters Inform, Bondex and North American Treasury services, as well as other niche domestic products.

Sidestepping specifics, the overlapping products will be eliminated in favor of a single product offering the best features, says a Reuters rep. In areas that are not a part of Reuters’ core business, the vendor will eliminate the product altogether and fill the void with partnerships with other companies. The goal of eliminating some products is to free up its roughly 2,000 developers to work on new products.

The product strategy is part of Reuters’ IP-based "new common technical architecture," which is aimed at the mid-tier market, which will reduce delivery and support costs, says Reuters CEO Tom Glocer.

New digs mean new trading turrets for Boston-based Brown Brothers Harriman. In its move from its 59 Wall St. offices to three floors in 140 Broadway, BBH switched to Syntegra trading turrets from IPC V-Band turrets, sources familiar with the project say. The 52 BBH traders in New York currently use V-Band turrets that predated the IPC Information Systems acquisition of the company, but they will switch to Syntegra once the move-in is complete in late November or early December. A "hoot n’ holler" circuit maintained by IPC between New York and London will be retained.

SmartTrade signed deals with two new client exchanges: Euroclass, a pan-European small-cap exchange, and the Weather Board of Trade (WBOT), a US-based weather derivatives venture. SmartTrade is best known for its in-house matching system that allows banks to operate internal private exchanges, but it also provides technology for multibank and exchange "communities." WBOT CEO Dan Parker says he selected SmartTrade from more than 20 potential vendors because of its ease of integration with non-clearing Futures Commission Merchants and brokers and its ability to adapt to instruments on the fly.

Terms: Instinet purchased Island for $508 million in an all-stock transaction. The deal is scheduled to close by the end of the year.

Organization: The merged company will take on the acquirer’s name. Ed Nicoll, chairman of Island, will become CEO of Instinet; Matt Andresen, president and CEO of Island, will become chief operating officer of the ECN business. Impact: Together, the firms account for 22 percent of Nasdaq share volume and 30 percent of Nasdaq trades.

Analysis: Analysts and insiders question the compatibility of their technologies, market strategies and management styles. Instinet’s technology has a reputation for being slow and difficult; Island is known for speed, efficiency and reliability. Island’s corporate culture, if you can call it that, is also flexible and light on its feet while Instinet, with help from parent Reuters, has a reputation for being bogged down in bureaucracy. One analyst goes so far as to warn, "Reuters is going to mess it up."

The American Stock Exchange (Amex) plans to replace the New York Stock Exchange Point of Sale system, which is in use at 175 specialist positions, with the New Equity Trading System or NETS. Set to be fully in place by the first quarter of next year, NETS debuted about a month ago to about 10 percent of Amex’s floor traders, giving them the ability to trade any equity-based product in the US, improved point-and-click functionality and new order types, officials say.

NETS is technically capable of trading Nasdaq and NYSE-listed shares, but it will first be used to speed traders’ use of the Intermarket Trading System (ITS) linking the NYSE and Amex to regional exchanges, says Ralph Rafaniello, executive vice president of floor operations at the Amex. NETS has been under development for about 18 months.

Initially, the NETS platform is supported by eight HP/Compaq Alpha ES40 servers running the VMS operating system, originally from the former Digital Equipment Corp. (DEC). The workstations are Envisex 2 X-terminal devices.

"We are really limiting most changes to the functionality. We did not have to change terminals or cabling," Rafaniello says. "As soon as a POS security is identified in the security master file, it’s a matter of routing to NETS, booting up the device and then it’s ready."

Ten months to the day after it sustained damage in the Sept. 11 attacks, the Bank of New York reopened its 101 Barclay Street Technology and Operations Center. Although a small percentage of employees returned to work in the 22-story building this spring, the building still needed extensive repairs. Along with hundreds of broken windows, the dust from the collapsed towers and surrounding buildings had to be tested for asbestos. None was found, says a BoNY rep. Although the financial firm’s disaster recovery sites in New Jersey and Westchester County were immediately up and running to handle business, the communication lines at 101 Barclay Street experienced a logjam.

The Chicago Board Options Exchange (CBOE) rolled out its Large Order Utility (LOU) to all of its securities. LOU is a "hybrid" voice/electronic options-order delivery and confirmation system, which debuted in July on about one-third of the CBOE’s 1,500 names. LOU and the next phases of the "hybrid" project are an effort to provide the depth of the traditional exchange and the speed of an all-electronic exchange such as the International Securities Exchange (ISE), says a CBOE spokesperson. LOU augments the CBOE’s current automatic-execution facility, RAES (Retail Automatic Execution System), a mainframe-based application, which delivers the current best price in the market for lots limited in size to between 50 and 250 contracts, depending on the underlying security.

Communications vendor Purple Voice has installed its Voice over IP (VoIP) Global Audio solution at Bear Stearns’ new Manhattan headquarters at 383 Madison Ave., providing the investment banking staff with a squawk box service without the need for separate hardware or cables.

Researchers, analysts and private client services staff are connected to the firm’s trading floors by way of digital feeds from "hoot" microphones on the bank’s IPC Information Systems turrets, and to television and internal public address systems, allowing them to listen to market activity on multiple channels at once. They can also use audio playback and recording features.

Purple Voice is equipped with two-way intercom-style telephony, but that feature is not in use at Bear Stearns, where Purple Voice is broadcast-only, says Andrew Heizer, director of consulting services at DVI Communications, which supervised the voice technology installations. Global Audio is supported on Windows-based Dell servers at Bear Stearns.

Global Audio also takes advantage of IP capabilities. Unlike an analog phone network, an IP network, which is server-based and keeps track of all its addresses, cuts down on white noise by isolating dialogue and maintains audit trails of conversations, including instant messaging dialogue. It also synchronizes outputs in user groups listening to a broadcast so that it resembles the simultaneous effect of an analog broadcast.

Swapswire, the interdealer interest-rate derivatives trading system backed by a consortium of 23 banks, plans to launch next month after extensive delays and an entire systems overhaul. In a change of business focus, Swapswire won’t offer electronic execution capabilities at launch. Its initial focus will be on providing a system for electronic booking and confirmation of trades negotiated externally between dealers to enable more efficient confirmation and processing for trades negotiated by phone, e-mail or proprietary systems. CEO Chip Carver says adding execution is still part of Swapswire’s business plan, but that the main focus is delivering a product to build on, and attracting more users.

Slam Dunk Networks, owner and operator of a guaranteed delivery transaction network, has changed its strategy, cut staff and closed its London office after its backers withdrew funding. Slam Dunk CEO Robert Miller says the company is changing from a services-based company to a software-based one. "Customers are clearly saying they’d rather buy the software than the service," he says. "And getting paid up front is a good thing." The Slam Dunk network uses the Internet for secure delivery of business-to-business and transaction messages, cutting down on expensive virtual private network and wide area network solutions.