The system, which will be based on Searchspace's iTMÔ, the intelligent Transaction Monitor software, will be the first application of Searchspace's real-time, decision-automation technology to monitor all trading activity for an all-electronic exchange. Searchspace, the market leader in intelligent enterprise systems for automated information management, will manage the installation and implementation of the system, and provide ongoing technical support to the Archipelago Exchange and its regulator, the PCX. Searchspace, headquartered in London with offices in New York and Frankfurt, has implemented similar surveillance systems at the London Stock Exchange, Lloyd's of London and The Bank of New York.
"As Archipelago and the Pacific Exchange prepare to establish the first totally open electronic national stock exchange in the U.S., it is critical to have an equally sophisticated, electronic surveillance system in place," said Gerald D. Putnam, chief executive of Archipelago. "This state-of-the-art system will help ensure that this new marketplace is not only the most efficient in the nation, but also brings the highest level of regulatory integrity." "The Pacific Exchange has always shown a commitment through its regulatory practices to maintaining fair and orderly markets," said Philip DeFeo, chairman and CEO of the Pacific Exchange. "The Searchspace system will augment our current methods of surveillance, and is a natural and necessary step to ensuring the integrity and fairness of the new exchange."
"The system provides a framework capable of interpreting millions of trade related transactions each day, automatically learning and recognizing patterns of trading activity, and alerting users to these patterns as well as other potential problems," said Konrad Feldman, CEO and co-founder of Searchspace Corp. "This information drives an organization to respond immediately to patterns that demand the most interpretation, providing a more effective and proactive means of regulation."
Archipelago was formed in December 1996 with software developer, Townsend Analytics. It is one of the original four ECNs approved in January 1997 by the SEC. Since its inception, Archipelago has offered subscribers outbound order preferencing to effectively create a national limit order book for Nasdaq stocks. Its leading-edge technology, open architecture and innovations, such as sweep functionality based on a proprietary algorithm, facilitate the best execution for investors. Archipelago is also the only ECN with major investors in both the institutional and retail financial services sectors. The Archipelago trading system provides investors fast, cost-efficient and anonymous access to the market. Its average daily volume more than tripled since June 1999.
About the Pacific Exchange
Founded in 1882, the Pacific Exchange today trades more than 2,500 stocks, bonds and other securities issued by publicly traded companies, as well as options on more than 850 stocks. It is the fourth most active stock exchange in the country, and the third largest stock options exchange in the world. The Pacific Exchange has a history of innovation. It was the first exchange in the world with electronic order routing, execution and reporting systems; the first to develop net clearance and settlement systems; and the first exchange in the U.S. to demutualize its equities business. This past May, the SEC approved PCX Equities, Inc. as the nation's first for-profit stock exchange.
Searchspace, the intelligent enterprise systems company, enables the world's leading organizations to realize the vision of the 'Intelligent Enterprise'. Searchspace solutions provide a new technology infrastructure for addressing core operational issues: managing risk, ensuring compliance, identifying opportunity and increasing efficiency. Through the automation of key business decision processes, the solutions deliver significant continual value, fundamentally changing the way in which customers understand their business and drive key operational processes. Increasing shareholder value, tackling the challenges of the e-economy, enabling proactive enterprise response to risk and opportunity, driving efficiency and increasing profitability - this is the Intelligent Enterprise.
Searchspace is Headquartered in London, England with offices in New York, NY and Frankfurt, Germany. Customers include the Bank of New York, London Stock Exchange, Archipelago, Lloyd's of London and the Royal Bank of Scotland.