OTC trades are privately negotiated contracts between two counter-parties often with a number of cross-market components. In recent years this markets has seen substantial growth in volumes and now represent a major source of Financial Institutionsâ revenues. Unlike well-defined exchange traded instruments such as stocks, each trade can be unique and only be processed by communicating and exchanging all the economic components of the trade.
ePulse uses eML its eMarkets Library, a set of over 250 generic components that are used to construct instrument types and define processing rules. Using eML to take a top down approach that allows new transaction types to be easily added with much reduced development effort. It enables the OTC Trading system to be quickly enhanced to support new trading products and dramatically reduces the time to market for new product types.
Barry Patel, Sales and Marketing Director of ePulse, commented "We are targeting the OTC markets, as this sector has been poorly served by system vendors in the past due to the complexity of the transactions. Our approach using our Instant Messaging technology as a delivery vehicle will help improve the liquidity in certain markets as we provide an enhanced price discovery mechanism".
ePulse believes that it is one of the first vendors to employ this technique as a basis for building a new trading platform. The output from eML is a set of XML definitions for transactions that are used to control the order processing elements of the system. Another spin-off of using the eML approach is that it is possible to define equivalence with other standards such as FIX, SWIFT or TWIST. This makes the translation to other message formats or standards straightforward allowing for faster integration into customer infrastructures. The first version of the product will be delivered to an unnamed client towards the end of the year and will cover the growing OTC derivatives markets.
Tony Moulange, a consultant at ePulse said, "The industry is approaching a crunch point. As the global market recovers, factors including the growth of far eastern economies, such as China and India, and the need to better manage risk and exposure will drive demand for more complex and newer instrument types. This can already be seen with the recent growth in the derivatives markets. New trading platforms will be required that can easily be configured to support whatever products the market creates. Having a generic approach to such problems is the only way forward and existing platforms will struggle with the increasing complexity of the market."
ePulse was founded in 1998 to provide solutions and services to organisations trading in the global financial and commodities markets. This year ePulse attained the Deloitte Technology Fast 50 list of fastest growing technology companies. This is in addition to September 2002 and 2003 listing on the prestigious Sunday Times Tech Track 100 list as one of the fastest growing technology companies in the U.K.