IMTRADER Instant Messaging Application to Access Broker Research

Boston-based Pivot Solutions (booth 1818) is launching IMTRADER Network, an expanded version of its instant messaging network that includes a global directory service and research distribution in addition to electronic trading. The IMTRADER Network is based on a server that connects hundreds of buy-side firms to their sell-side counterparts. The new functionality is part of IMTRADER 3.0.

"When a broker joins the network, they can advertise their membership to the entire community of users," says Furqan Nazeeri, CEO, Pivot Solutions, a spinoff of Eze Castle Integration. Buy-side firms that are part of the network can register brokers and the sell side can register its buy-side clients.

"Imagine the FIX network with a global directory service - not only do you have a tool to enable a connection in 50 seconds, but you also have the ability to see who else is a member of the network," says Nazeeri. But he stresses that buy-side information is kept confidential. "The buy side doesn't want their information published without their consent," he notes.

Additionally, IMTRADER 3.0 includes the ability to access and distribute research over the instant messaging network using the Research Information Exchange Markup Language (RIXML) protocol. "In the same way that brokers use instant messaging to communicate trade information on stocks and sectors, they're using IM to communicate research on stocks," explains Nazeeri. Brokers "wanted the ability to connect the messaging network with their research libraries."

A buy-side firm can query its broker's latest research from within IMTRADER. "It will give you the latest research summaries," says Nazeeri, who adds that the entire process is automated and could circumvent traditional research distribution systems such as First Call.

IMTRADER automatically queries a broker's research library, eliminating the need to search for the research and manually rekey it into an e-mail, Nazeeri says.

Currently, sell-side firms use IMTRADER to communicate information and electronically trade with hedge funds and mutual fund clients, which are saved the expense of owning an order management system. The buy-side firms' instant messages are translated into the FIX protocol and captured by the sell-side OMS, which sends back the fills via FIX.

Robert Iati, a partner in TABB Group, says IMTRADER is innovative because it's a tool that puts the conversational element back into automation, which has made the trade sterile. "Because the fills are sent back [via FIX] without human intervention, you lose the color in the market," he says. This new tool "is somewhat overdue, and I think the OMS systems will benefit," says Iati.

Iati also notes that the company is doing reasonably well. "I like their model - they don't charge the buy side; they go through the sell side. The community is strong enough ... that the buy side pulls the sell-side community in," he says. According to Nazeeri, the company, which became independent from Eze Castle at the end of 2004, has grown by 10 percent this year and is on track to finish the year with about 40 brokers on the network.

But the real growth has occurred on the buy side - the firm, which currently has a couple hundred buy-side firms as members, is on target to close the year with 2,000 buy-side connections.

As for Pivot's desire to hook into research distribution, Iati says, that "could be useful, but I think it will be more challenging because the whole research business is changing. Some users will not be willing to go up the learning curve and change the way they do things."