Single-dealer platform
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A single-dealer platform (SDP) is software used by an
investment bank Investment is the dedication of money to purchase of an asset to attain an increase in value over a period of time. Investment requires a sacrifice of some present asset, such as time, money, or effort. In finance, the purpose of investing is ...
dealing in the
capital markets A capital market is a financial market in which long-term debt (over a year) or equity-backed securities are bought and sold, in contrast to a money market where short-term debt is bought and sold. Capital markets channel the wealth of savers to ...
to deliver trading and associated services via the
web Web most often refers to: * Spider web, a silken structure created by the animal * World Wide Web or the Web, an Internet-based hypertext system Web, WEB, or the Web may also refer to: Computing * WEB, a literate programming system created by ...
."So what is a single-dealer platform?" ''singledealerplatforms.org'', 24 February 2010
/ref> The function of an SDP is to integrate pricing,
liquidity Liquidity is a concept in economics involving the convertibility of assets and obligations. It can include: * Market liquidity, the ease with which an asset can be sold * Accounting liquidity, the ability to meet cash obligations when due * Liqui ...
, and information from multiple sources within a bank and provide access to them via a single
user interface In the industrial design field of human–computer interaction, a user interface (UI) is the space where interactions between humans and machines occur. The goal of this interaction is to allow effective operation and control of the machine f ...
. It is thus both an
integration platform Integration may refer to: Biology *Multisensory integration *Path integration * Pre-integration complex, viral genetic material used to insert a viral genome into a host genome *DNA integration, by means of site-specific recombinase technology, ...
and a delivery platform. Although the term SDP is sometimes used to describe an entire etrading suite, it properly refers to the integration and connectivity layer that sits on top of trading, pricing, risk management and other back-end systems. A key aspect of an SDP is that it merges information and services both within and across
asset classes In finance, an asset class is a group of financial instruments that have similar financial characteristics and behave similarly in the marketplace. We can often break these instruments into those having to do with real assets and those having ...
. An SDP will typically combine elements such as pricing, trading, research and
technical analysis In finance, technical analysis is an analysis methodology for analysing and forecasting the direction of prices through the study of past market data, primarily price and volume. Behavioral economics and quantitative analysis use many of the sam ...
within each asset class, and then draw together multiple asset classes. Although in principle SDPs are applicable to all types of tradable security, they have so far been most widely used in OTC markets such as
foreign exchange The foreign exchange market (Forex, FX, or currency market) is a global decentralized or over-the-counter (OTC) market for the trading of currencies. This market determines foreign exchange rates for every currency. It includes all as ...
and
fixed income Fixed income refers to any type of investment under which the borrower or issuer is obliged to make payments of a fixed amount on a fixed schedule. For example, the borrower may have to pay interest at a fixed rate once a year and repay the prin ...
. Single-dealer platforms should not be confused with single-dealer portals. A single-dealer portal is a stand-alone service provided by a bank for trading a specific set of products in one asset class, and is usually narrow in scope. A single-dealer platform, by contrast, is a broad layer of software that allows a bank to offer integrated information and trading across most or all of its businesses. Single-dealer platforms are sometimes also referred to as "single bank platforms". The terms are usually interchangeable.


History

Starting in the early 1990s, the gradual replacement of voice trading by
electronic trading In finance, an electronic trading platform also known as an online trading platform, is a computer software program that can be used to place orders for financial products over a network with a financial intermediary. Various financial products c ...
in the OTC markets created a requirement for banks to provide screen-based trading services to their clients. This was frequently achieved via intermediaries, known as multi-dealer platforms (MDPs), that were formed to deliver pricing and trading from multiple banks. Early on, however, banks such as
Morgan Stanley Morgan Stanley is an American multinational investment management and financial services company headquartered at 1585 Broadway in Midtown Manhattan, New York City. With offices in more than 41 countries and more than 75,000 employees, the fir ...
,
Credit Suisse Credit Suisse Group AG is a global investment bank and financial services firm founded and based in Switzerland. Headquartered in Zürich, it maintains offices in all major financial centers around the world and is one of the nine global " ...
,
Barclays Capital Barclays () is a British multinational universal bank, headquartered in London, England. Barclays operates as two divisions, Barclays UK and Barclays International, supported by a service company, Barclays Execution Services. Barclays traces ...
and Deutsche began offering single-dealer portals, mostly either via private pages on
Bloomberg Bloomberg may refer to: People * Daniel J. Bloomberg (1905–1984), audio engineer * Georgina Bloomberg (born 1983), professional equestrian * Michael Bloomberg (born 1942), American businessman and founder of Bloomberg L.P.; politician and ma ...
or via the Internet. Offerings of this kind enjoyed rapid success, and by 2005, despite vigorous competition from multi-dealer platforms, surveys showed the majority of clients relying on single-dealer rather than multi-dealer offerings."Barclays Capital Ecommerce Survey Shows Preference for Single-Dealer Platforms and Demand for Multi-Asset Class Trading Capabilities," 2006
Initially, most of these single-dealer offerings took the form of stand-alone trading screens that offered trading in just one family of instruments. Many banks developed a large number of such "point solutions," often having nothing more than branding in common. Since the mid-2000s, however, users of such systems have been expressing a need for multiple asset classes to be tradable through a single platform, rather than having to log into many services. Banks responded to this need by embracing the SDP concept and starting to build more integrated, multi-asset offerings. In the absence of any established frameworks, early SDPs were usually built in an ''ad hoc'' fashion, often using
Java applet Java applets were small applications written in the Java programming language, or another programming language that compiles to Java bytecode, and delivered to users in the form of Java bytecode. The user launched the Java applet from a ...
s to deliver a user interface via the Web. By the end of the decade the use of Java applets started to decline sharply, in favor of
rich Internet application A rich web application (originally called a rich Internet application, or RIA or installable Internet application) is a web application that has many of the characteristics of desktop application software. The concept is closely related to a sing ...
(RIA) technologies such as native
web application A web application (or web app) is application software that is accessed using a web browser. Web applications are delivered on the World Wide Web to users with an active network connection. History In earlier computing models like client-serve ...
s,
Flash Flash, flashes, or FLASH may refer to: Arts, entertainment, and media Fictional aliases * Flash (DC Comics character), several DC Comics superheroes with super speed: ** Flash (Barry Allen) ** Flash (Jay Garrick) ** Wally West, the first Kid ...
and
Silverlight Microsoft Silverlight is a discontinued application framework designed for writing and running rich web applications, similar to Adobe Inc., Adobe's Run time environment, runtime, Adobe Flash. A plugin for Silverlight is still available for a v ...
.


2012 and onwards

HTML5 HTML5 is a markup language used for structuring and presenting content on the World Wide Web. It is the fifth and final major HTML version that is a World Wide Web Consortium (W3C) recommendation. The current specification is known as the HTML ...
has become the technology of choice for SDPs from 2012 when vendors such as
Microsoft Microsoft Corporation is an American multinational technology corporation producing computer software, consumer electronics, personal computers, and related services headquartered at the Microsoft Redmond campus located in Redmond, Washing ...
and
Adobe Systems Adobe Inc. ( ), originally called Adobe Systems Incorporated, is an American multinational computer software company incorporated in Delaware and headquartered in San Jose, California. It has historically specialized in software for the crea ...
, who previously promoted their own technologies, moved to support the new standard. It has become usual for banks to employ a general-purpose SDP framework as a starting point. Such frameworks reduced cost and time to delivery, while still allowing a high degree of differentiation. As a result, few institutions now choose a custom-build strategy. SDPs become a major trading channel in the foreign exchange markets, and continue to gain ground in other asset classes."My word, my bond", ''Banking Technology'', 12 February 2010
/ref>


See also

*
Electronic trading platform In finance, an electronic trading platform also known as an online trading platform, is a computer software program that can be used to place orders for financial products over a network with a financial intermediary. Various financial products c ...
*
Electronic trading In finance, an electronic trading platform also known as an online trading platform, is a computer software program that can be used to place orders for financial products over a network with a financial intermediary. Various financial products c ...
*
Electronic communication network An electronic communication network (ECN) is a type of computerized forum or network that facilitates the trading of financial products outside traditional stock exchanges. An ECN is generally an electronic system that widely disseminates orders ...
*
Retail forex platform Retail foreign exchange trading is a small segment of the larger foreign exchange market where individuals speculate on the exchange rate between different currencies. This segment has developed with the advent of dedicated electronic trading p ...
*
Stock market data systems Stock market data systems communicate market data—information about securities and stock trades—from stock exchanges to stockbrokers and stock traders. History The earliest stock exchanges were in France in the 12th century and in Bruge ...
*
Straight-through processing Straight-through processing (STP) is a method used by financial companies to speed up financial transactions by processing without manual intervention (straight-through). It was developed for equities trading in the early 1990s in London for auto ...
*
Trading system Algorithmic trading is a method of executing orders using automated pre-programmed trading instructions accounting for variables such as time, price, and volume. This type of trading attempts to leverage the speed and computational resources of ...
*
Trading room A trading room gathers traders operating on financial markets. The trading room is also often called the front office. The terms "dealing room" and "trading floor" are also used, the latter being inspired from that of an open outcry stock ex ...


References

{{Reflist


External links


singledealerplatforms.org: ''The Single-Dealer Platform News Feed''


* [http://www.waterstechnology.com/sell-side-technology/analysis/2195389/singledealer-platforms-not-dead-as-banks-shape-up-for-sefs "Single-Dealer Platforms Not Dead as Banks Shape Up for SEFs", ''Waters'' Magazine, 31 July 2012] Financial software