Progress Software has teamed up with fellow financial software provider Statistical Research Laboratory (SRL) to launch a complete trading technology solution for brokers and hedge funds.
When launched, the planned solution, which will be powered by the Progress Apama complex event processing platform, will offer two components. ‘Broker in a box’ provides brokers with multi-asset, outsourced algorithmic trading and internalisation capabilities, while ‘hedge fund in a box’, which gives hedge funds the technology to pursue complex, high-frequency trading strategies as well as manage and monitor profit and loss, risk and back office functions.
The product will also enable users to internalise order flow, which Progress said could bring “significant” cost savings.
“In the past, brokers and hedge funds have had little choice but to build this complex technology themselves, which can cost millions and take up to a year to implement,” said Dr Giles Nelson, chief technology strategist at Progress Software, in a statement. “We’ve engaged with a number of large brokers who currently do not offer algos themselves, but instead outsource this type of execution to other brokers. With the SRL solution, using Progress Software’s Apama technology, brokers can execute these algos themselves.”
Neil Puri, CEO of SRL, added: “In the past, some traders may have been put off from setting up their own funds because it would cost them too much to set up this architecture. The SRL solution significantly lowers the barrier to entry from a cost and time-to-market point of view for traders wanting to start up their own funds.”
According to Nelson, the planned solution could help brokers cope with the Obama Administration’s proposed ’Volcker rule’ which, if enacted, would to prevent US deposit-taking institutions from engaging in proprietary trading or owning hedge funds and private equity funds.
“If investment banks have to spin out their proprietary trading desks and hedge funds, these new funds will be looking for the technology platform that allows them to continue trading rapidly and cost-effectively,” he said. “[The Volcker rule] may not happen for a while, if indeed at all, but we have already seen prop traders and hedge fund managers at investment banks leaving to go it alone.”