On the last day of 2012, within an hour of the closing bell, New York Stock Exchange traders were alerted to a technical glitch in the markets order-matching system. The problem affected just 26 stocks and was cleared up within four minutes but that good news was tinged with the knowledge that far worse can happen, and did.
For those who build and manage market and trading technologies, 2012 was punctuated by trouble. High-profile system malfunctions marred the BATS Global Markets and Facebook IPOs in March and May, respectively, and brought down market maker Knight Capital Group in August. These too were good news/bad news incidents, not as catastrophic as the still-reverberating flash crash of May 6, 2010, but reminders that such technological snafus happen too frequently for comfort.
All of this casts a pall over the industry and profession represented by the Trading Technology 40, Institutional Investors second annual global ranking of the most prominent innovators and managers in the field. Their comments reflect soul-searching about the incessant pursuit of lightning-fast transactional capability. Do we really need to be trading in nanoseconds? asks Brenda Hoffman (No. 27), head technologist of Torontos TMX Group. Dan Keegan (No. 18), global head of cash equities at Citi, considers speed a commodity and says factors like client service and global footprint will define the winners.
Still, the trading technology leaders selected by II staff based on their accomplishments and contributions at both the company and industry levels are hardly retrenching or lacking for successes. For example, CME Group (Kevin Kometer, No. 1) and Chicago Board Options Exchange (Gerald OConnell, No. 8) pulled off major system conversions without a hitch. IntercontinentalExchanges information technology track record (Edwin Marcial, No. 2) helped underpin its takeover bid for NYSE Euronext (Peter Leukert, No. 11).
Last years rankings, shown in parentheses, are from the initial Trading Tech 30. Newcomers are denoted PNR (previously not ranked).
The ranking was compiled under the direction of Senior Contributing Editor Jeffrey Kutler. Individual profiles were written by Kutler; Editor Michael Peltz; Asia Bureau Chief Allen T. Cheng; Senior Writers Frances Denmark, Imogen Rose-Smith and Julie Segal; Staff Writer Neil Sen; and Associate Web Editor Ben Baris.