Stephen Smit has a vision for how he would like to see securities traded in the future.
The model which Smit, a managing director in Europe of State Street's proprietary custody system Global Link, puts forward is radical only in its simplicity. New technology, he says, should allow for a cross-border equity transaction to be completed in four clicks of a fund manager's mouse.
The process would run like this: A portfolio manager sitting in his or her office develops an investment idea and decides to buy, say 100,000 shares in a given company.
Click one: inputs the order into the trade order management system and routes the instruction to the equity blotter within the system on the buy side trader's desk.
Click two: routes the equity trade to either the broker of their choice, the exchange floor, or an alternative trading venue (for example an electronic crossing network).
As information on that equity fill flows back electronically, the trade order management system strips out the foreign exchange trade required to settle the transaction.
Click three: routes the foreign exchange trade to the counterparty bank of choice and as information on the foreign exchange fill comes back...