HyperFeed Acquires Smart-Order Routing Provider
By WS&T Staff
Wall Street & Technology
February 17, 2005
Leaping into the direct-access trading business, HyperFeed Technolgies announced Wednesday that it has acquired Focus Technology Group, a Chicago-based provider of smart-order routing technology.
HyperFeed has been in the managed-service business through its HPTX ticker plant for providing direct-exchange feeds. This acquisition moves the company out of the model for infrastructure and IT onto the front-office trading desk, says Paul Pluschkell, president and chief executive officer of Chicago-based HyperFeed.
"It really reinvents HyperFeed into a direct-access provider," says Pluschkell. Pluschkell said the smart-order routing system would be broker/neutral since HyperFeed is a software company, not a broker, and does not have its own order book. "Since Lava's acquisition by Citigroup they're no longer agnostic," says Pluschkell. "We're independent without requiring an order book or a certain place to clear," he adds. He says the deal positions the company for Reg NMS compliance because the smart-order router shows not just top-of-book, but also the depth-of-book from equity exchanges and electronic communications networks.
The Focus smart-order router works differently than others on the market and will help firms with SEC rules for achieving best execution, contends Pluschkell. Pluschkell says the Focus smart-order router scans the markets in real time, figures out which markets have the best price for each stock and relative price points, and then breaks up the order before routing the pieces to multiple destinations. "We're offering true smart-order routing," says Pluschkell, who contends that "There's a lot of static routing going on and just dumping entire orders on the large ECNs."
Terms of the all-cash deal were not disclosed, but Pluschkell said the deal included royalty payments, noting the company would file an 8-K with regulators. HyperFeed acquired the personnel along with the technology but declined to say how many employees are in the company. Focus executives will be put in charge of HyperFeed's new transaction strategy.
Focus was founded three year ago by its President, John Margolis, who is a former futures trader on the Chicago Mercantile Exchange, former index-arbitrage trader at Spear Leeds & Kellogg and one of the original members of Teranova that built the Archipelago platform.
In terms of diversifying its business, the deal gives HyperFeed two paths -- the ticker plant with the low-latency data solutions and the smart-order routing. "We're not a one-trick pony any longer," beams the CEO. |
