Aleri Consolidates Real-Time Liquidity Across Fragmented Market
December 5, 2007
Event processing technology provider Aleri has launched a tool that measures the real-time depth of liquidity for specific securities that may trade across multiple execution venues in today’s increasingly fragmented market.
Aleri’s Market Liquidity Analysis (MLA) engine rests on top of Aleri Streaming Platform, the company’s flagship event processing system. MLA normalizes order-book feeds from two or more quote-displaying execution venues, including exchanges and electronic communication networks, so users can view a security’s price-point volumes for orders across venues.
“With the fragmentation of liquidity pools, we saw a clear need for a better approach to consolidating and analyzing market liquidity,” said Don DeLoach, CEO of Chicago-based Aleri, in a statement. “While there are tools out there for viewing a consolidated order book, there haven’t been any good tools for analyzing a consolidated market.”
While the largest Wall Street trading firms are likely to have developed such technology in-house--streamlining their processing of data inputs and reducing latency to see market information in as close to real time as possible--Aleri is one of several vendors, such as StreamBase Systems and Progress Software’s Apama division, offering software that provides similar capabilities to other market segments.
“As these technologies become more widely available, it’s not just the bulge-bracket firms looking to revamp their technology,” said Adam Sussman, a senior analyst at New York-based research firm Tabb Group, adding, “We see these new technologies filtering way down to mid-tier broker-dealers and buy-side shops that see value in reducing latency.”
The need to consolidate order books has become more urgent with the advent of Regulation National Market System in the U.S. and the European Union’s Markets in Financial Instruments Directive, both of which became effective this year and are expected to result in securities trading across an ever greater number of venues.
“There is clearly a need for tools like Aleri’s new MLA server to help firms analyze market depth in a fragmented market,” said Mike Powell, VP of data feeds at Reuters, in a statement. He noted that “Aleri’s out-of-the-box support for full market depth via” Reuters Market Data System and Reuters Data Feed Direct servers “makes this an attractive product for firms that want to move quickly to enhance their market-depth analysis capabilities.”
Aleri launched its Streaming Platform in March 2006 along with an application--also resting on top of the core product--called the Liquidity Management System, which enables corporate treasurers to manage their firm’s liquidity in a more automated and effective manner.
Jeff Wootton, VP of strategy at Aleri, said major financial services firms including Commerzbank, Mitsubishi and HSBC Private Bank use its Streaming Platform; Caisses d’Epargne and Dexia Group are also using LMS. Hartford, Conn.-based George Weiss Associates recently adopted Streaming Platform to track profits and losses in real time.
Aleri Streaming Platform also serves as a development platform, enabling users to build their own applications--such as analytical software to slice and dice market data--or connect to others more quickly. According to Wootton, such applications can include a firm’s own algorithms pinging non-displayed execution venues, or dark pools, and allowing their liquidity to be integrated with data obtained by MLA to consolidate order books across an even greater swathe of the market. Data from a firm’s own internal matching engine can also be included.
