Progress Software Corporation (NASDAQ: PRGS), a leading software provider that enables enterprises to be operationally responsive, announced today that it has joined forces with Statistical Research Laboratory (SRL), a dynamic and innovative company developing software to deliver plug-and-play solutions to financial trading desks, to provide a complete trading technology solution for brokers and hedge funds.
The SRL solution will be powered by the Progress Apama Complex Event Processing (CEP) Platform. It will offer two components; 'Broker in a box' technology, providing brokers with outsourced algorithmic trading and internalization capabilities across multiple asset classes and 'Hedge fund in a box' capabilities, offering hedge funds the technology platform to trade complex, high frequency trading strategies as well as to manage and monitor P&L, risk and back office functions such as reconciliations and corporate actions. The solution will also enable users to internalise order flow -- another significant cost-saving.
Dr Giles Nelson, Chief Technology Strategist at Progress Software, said: "In the past, brokers and hedge funds have had little choice but to build this complex technology themselves, which can cost millions and take up to a year to implement. We've engaged with a number of large brokers who currently do not offer algos themselves, but instead outsource this type of execution to other brokers. With the SRL solution, using Progress Software's Apama technology, brokers can execute these algos themselves. This leads to increased revenues while avoiding an expensive technology spend and the need to hire a team of quants and technologists to maintain it. "
Neil Puri, Chief Executive Officer at SRL, added: "For hedge funds looking to launch, SRL offers them the platform to do so. In the past, some traders may have been put off from setting up their own funds because it would cost them too much to set up this architecture. The SRL solution significantly lowers the barrier to entry from a cost and time-to-market point of view for traders wanting to start up their own funds. The 'eat what you kill' hedge fund culture means that traders don't have the luxury of time or incentive to build and maintain their own technology infrastructure. Whilst this is a necessary requirement, it is not sufficient - however, using SRL's solutution allows client resources to be focused on developing the alpha edge instead of reinventing the wheel."
This planned offering comes after President Obama's recently proposed bank reforms, calling for banks to be banned from running their own proprietary trading desks and "owning, investing in or sponsoring" hedge funds and private equity groups.
Dr Nelson continues: "The Obama speech on January 26 is hugely significant. If investment banks have to spin out their proprietary trading desks and hedge funds, these new funds will be looking for the technology platform that allows them to continue trading rapidly and cost-effectively. The Obama measures - or Volcker rules - may not happen for a while, if indeed at all, but we have already seen prop traders and hedge fund managers at investment banks leaving to go it alone."