The best way to find out if you can trust somebody is to trust them." Ernest
If there has been one constant during my career in the City it has been the pivotal role of technology. Or to be more specific the development of technology. Those people that know me best will know that when it comes to the practical I am very much a fish-out-of-water
but at the same time those same people will also know of my ability to innovate and find solutions to practical problems. My imagination during my management career has been one of my greatest attributes, often finding ways out of a problem or a mess where
none looked possible. So technology for me has been one of a constant learning curve. Always willing to try and understand technology without having any capacity to programme or develop systems.
For me technology has always been a means to a business end and not the end itself. By forging a deep appreciation of technical possibilities I never ruled anything out or worse boxed myself into a corner.
I have managed technology departments alongside business operations and
always felt that I could bridge any gaps in knowledge or understanding between
people working in both. At least, I could act as mediator and make decisions
based on a dual responsibility. The successful results in my time were ample
proof that creating a middle management decision making capability between IT
and business operations could benefit, in the quality of the resulting systems
and the closeness of business requirements to the functionality developed. A
successful by-product was a happy and unified team between the two operations,
which was crucial at times and especially during testing.
My very first experience of an industry systems project was when the London Stock Exchange (LSE) replaced manual bargain checking with an electronic version called "Charm Checking" I am not sure where the name originated and I guess there might be somebody
still out there that could tell me where it came from.
The Charm checking system was quite a shift for the City but especially
for small firms like C.T.Pulley where i managed, still operating comptometers as its main technology tool for calculating P&L and accounts.
The LSE did a pretty good job in getting the various terminals installed around the Brokers and Jobbers offices country wide and training the staff to enter the bargains, as they were ripped out carbon copies from Jobbing Books or completed order forms.
These bargain slips were hand written and contained details of the bargain; B/S, amount and the three digit Stock Exchange firm code. This was all that was required although there might be a bargain condition for example CS for Cash and XD for Ex Dividend.
The bargains were all input over the terminal mainly after trading finished on the Stock Exchange floor at 3.30pm but traders would often bring slips in during the day for early input to help get the days business sent through as early as possible. When
the traders were back at their desks in the office they would still trade over the telephone. These bargains were entered with the condition EB (Early Bargain).
Overnight the LSE would run the various matching programs over their mainframe system located in St. Alphage House (on London Wall beneath
the Plough pub). The following morning firms without mainframe computers would pick up the various matched and unmatched checking sheets from the CSP (Central Securities Payment office) that was printed on light green and white striped paper.
The matched sheets were self-explanatory with agreed bargains sorted by stock Sedol code and alphabetically by firm name. Each Jobber had notified the LSE of a tolerance amount against which they were happy for a bargain to be matched. For example it might
be on a percentage of the value of the bargain. Usually it would only amount to 10 or 20 shares. These tolerances were mainly because the bargain was an investment of an estimated amount of money and it quite often left a small difference that the Jobber was
happy to match without referring back to the Broker.
Incidentally, this did not prevent a number of verbal disputes with Ronnie Michaels our Head Trader on the Industrial Book who watched and counted every penny. It worked for him, as in my entire in career I never knew of a trader that could continuously
make a small profit on each bargain. A £10 and a £20 there all mounted up at the end of the year and he was always the top earner. Always leave something in the market was his motto. It worked and it's a humble market view that could be a lesson well learned
in today's unscrupulous markets.
Unmatched bargains were all listed by firm with the details of the entry input by my firm and the alleged bargain details underneath. It was an eyeball view that determined what was at fault. A telephone call between the checking clerks of both firms would
determine if it had to be referred to the dealers on the Stock Exchange floor. Disputes had been known to go on for days until a resolution found. Normally it would be in the Brokers favour but only after the Jobber had gained the upper hand to get more business
to make up for any loss.
The Charm checking experience was on the whole, a good one. The LSE managed the project and got technology luddites accepting that the new system provided far more benefits than manual. And that it was not only cost effective but provided ample opportunity
for business expansion, whilst overheads remained unchanged.
What was to come after Charm would fundamentally change the City forever but that is another story for another chapter!