'TransactTools May Be NYSE Euronext's Most Important Asset'

By: Ray Pellecchia

File Under: TransactTools

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Interesting article by Larry Tabb, CEO and founder of Tabb Group, in Wall Street and Technology magazine: NYSE TransactTools May Be NYSE Euronext’s Most Important Asset; NYSE TransactTools, a FIX-engine provider, could be the ticket to the NYSE’s survival. Excerpt:

So where does NYSE TransactTools fit into the equations? One of the critical factors driving flow to the largest brokers is IT. As electronic trading, algorithms, latency, speed and liquidity pool connectivity become more critical, the amount of technology needed to trade becomes more significant. The more expensive it is to acquire this technology, the more difficult it is for the small and midtier players to compete with the top brokers. TransactTools is one of the only firms that can change this equation.

Since everyone trading at the NYSE needs to be connected to SFTI (the only way to get to NYSE) and NYSE is connected to all other markets (a Reg NMS requirement), that means SFTI is the only network that literally connects all U.S. brokers, exchanges and ECNs. If TransactTools, via Wombat, can develop an effective, cost-sensitive hosting solution in the SFTI network, NYSE TransactTools can begin to bring down the cost of high-speed/low-latency market data needed to trade. And if NYSE TransactTools can embed low-latency transport, a set of flexible algorithms, a DMA/EMS platform, CEP and a time-series database into SFTI, NYSE TransactTools can begin to empower the midtier and smaller brokers that are quickly being shut out of the market.

Not to take Mr. Tabb too literally, but I think some of our other businesses could also lay claim to being our "most important asset." Intangibles such as brand, reputation and credibility are also critical components of our future success. But his point is well taken. It's clear that TransactTools and our other Advanced Trading Solutions businesses are becoming a core component of NYSE Euronext, complementing our existing markets, listings and data businesses and creating a new avenue for serving customers and growing our company.