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Talking Intelligent Trading with Andrew Delaney: A Symphony of Paper Tigers

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Some of us were encouraged – relieved, even – to read on various non-value-added news ‘services’ (PR wires?) about the success of the Symphony trader messaging collaboration in securing financial support from Google Alphabet, the new incubator-type funding organisation supported by You Know Who.

We were pleased because Google’s support clearly indicated to us that Symphony was no paper tiger.

Like many in the industry, we’ve long been perplexed by Bloomberg Chat and it’s ability to cast a spell of stickiness over the perhaps over-dimensioned, over-priced and over here Bloomberg Terminal. We love the Bloomberg Terminal but chat should be free and ubiquitous, to our minds. Like Skype, and stuff, right? We are all millennials now, after all.

Symphony, obviously, is the industry’s response to Bloomberg messaging. It’s only taken a decade or two but hey, we are here and we have funding to break the lock on trader desktops the world over. Certainly nothing wrong in that.

But until we heard the news of Google’s commercial involvement, we had been concerned that Symphony would hit a flat note, so to speak. That it was nothing more than the latest in a long-running series of industry initiatives designed only to break suppliers’ locks on mission-critical functionality, only to disappear back into some or other back water.

In other words, a paper tiger.

Our fears may not have been as unfounded as some might think. Here are some examples of paper tigers that have impacted our lovely industry:

EJV Partners. The Electronic Joint Venture of major investment banks that aimed to break the stranglehold of the Bloomberg Terminal by contributing key analytics and data into a competitive service. Salomon Brothers YieldBook was a key component. EJV ended up as part of Bridge Information Systems, then Reuters, then Thomson Reuters, where YieldBook I believe can still be found.

Turquoise. The dark pool designed to break the stranglehold of the London Stock Exchange over exchange and transaction fees as part of the MiFID I initiative. Now part of, erm, the London Stock Exchange.

Boat. An industry initiative designed to demonstrate the industry could do trade-reporting for themselves – and the reguators thus didn’t need to impose. After an initial hubbub, Boat was acquired by Markit, under the latter’s remit to streamline all industry process for its then-owners, all industry practitioners. Last I heard it was sold off by Markit and now features as a line item on somebody’s web site. You tell me.

Govpx. Contributed US government bond price feed aimed at smashing Telerate’s and later Bloomberg’s dominance. Ended up dominated by a single IDB (ICAP), thus contributing to the latter’s dominance of the wholesale government bond pricing marketplace.

TradeWeb. A multi-dealer platform aimed at breaking the dominance of Bloomberg in the fixed-income transaction space. Made a dent; reduced fees; ended up with Thomson, then Thomson Reuters, where it resides to this day.

Electronic Broking Services (EBS). Perhaps the closest to a successful case of industry collaboration that broke the mould. Founded out of the FXnet ‘netting by novation’ initiative set up by Chase Manhattan’s Peter Bartko, EBS gave Reuters Dealing – specifically Dealing 200-2 matching – a true run for its money. Once its job was done, it nestled nicely at ICAP, where it remains to this day (data centre in Slough, natch).

We remain optimistic that Symphony will be more EBS-like than some of its peers. With Google behind it, we are doubly optimistic.

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