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Buyers Guide & Resource Directory

A Time for Anticipation |  For Front Office, More of the Same Means More $$$$ |  MiFID Brings New Trading, Data Management Opportunities |  Easdaq Makes a Comeback as Equiduct |  Clearing Firms Extend Their Outsourcing Businesses | 

A Time for Anticipation

January 1, 2007
By Jeffrey Kutler

Almost regardless of current business conditions, the turn of a year allows time for both reflection and optimism. No matter how good or bad the previous year, the new one tends to look at least a little brighter, at least at the beginning.

The securities industry as a whole is finishing another in a string of highly profitable years, consolidating its recovery from the 2000-2002 downturn. If the pattern of these recent years holds, the industry's technology suppliers and users can look forward to a bigger and better 2007 in terms of budgets and ability to undertake and complete projects-but they won't be benefiting proportionally. For example, through the first nine months of its current fiscal year, Goldman Sachs Group's net revenues jumped 51 percent, but communications and technology spending rose only 8 percent. That is a reality by now familiar to information technology managers, and they've by and large adjusted to a climate in which money doesn't get invested unless there is an identifiable, relatively short-term payback.

There are reasons, however, for the capital markets technology sector to look ahead to 2007 with more than the usual level of, if not outright optimism, anticipation. The industry's structural ground is shifting, and on a global scale. By Dec. 20, the shareholders of NYSE Group and Euronext will have voted on their unprecedented transatlantic merger. But large-scale combinations of exchanges-to which investment banks and their clients are reacting both technologically and with alternative-market strategies of their own-are only part of the fast-changing landscape. The coming year will also see the twin international market-structure and best-execution regulations, Regulation NMS in the U.S. and the Markets in Financial Instrument Directive in Europe, go into effect. Given the global interconnectivity of markets, firms and clients alike must be cognizant of and react to both sets of rules, even if their activity is largely confined to one continent or the other. These and related forces, such as the continued growth and demanding nature of hedge funds and the premium they and virtually all trading organizations now place on transaction speed and low latency, add up to challenges for those in a position to meet and solve them with technology.

We at Securities Industry News share that sense of anticipation as we look ahead to following these operations and technology developments across the trade cycle and from front office to back in the year ahead. As we do, we are presenting our annual Resource Directory arranged by product and service categories, to which we are adding new value: analyses by our correspondents that cover several sets of trends that the user community will be watching in the new year-our first Buyers Guide. We hope you find the commentary and listings a useful tool for 2007. And we look forward to delivering more and better on our mission to be your essential agenda-setting source of news and analysis as these exciting developments unfold.