Morgan Stanley Upgrades Equity Systems

The trading infrastructure for the US equities has been overhauled by Morgan Stanley for keeping pace with a market where millionths of each second count. The bank has modernized the technology of stock trading for saving fractions of a millisecond and it is now moving the clients onto the new platform, as announced by the Global Co-Head of Morgan Stanley Electronic Trading, Bill Neuberger. Incidentally, a millisecond is the thousandth of 1 second, whereas a microsecond is a millionth. When the buy or sell orders for customers are carried out, these changes will help the bank to get 99% of the shares available on exchanges at a specific price, up from the high 80s experienced a couple of years earlier.

Incidentally, the regulatory changes and faster computers aimed at increasing the competition among the exchanges have enhanced the speed at which stocks change hand in course of the last 15 years. High frequency trading now makes up more than half of the total stock volume of US. Incidentally, high-frequency trading relies on fast access to the ever changing data. The introduction of this new trading technology was a project with length of 18 months and Andrew Silverman & Bill Neuberger oversaw this project.

According to Neuberger, over the years, market has evolved a lot and therefore importance of speed and smart coordination became more prominent. He added that trading has changed fundamentally over the last few years. Hence, Morgan Stanley had to think about it at a level of microseconds rather than milliseconds.

Neuberger however declined to divulge any information on the amount of money spent by the bank on this project. Neuberger said that Morgan Stanley is known to make changes to the equities technology at a gradual pace and this time was no exception. Neuberger has worked in Morgan Stanley for over 24 years and that includes his experience in working in information technology for 8 years.

Incidentally, the equity trading unit of Morgan Stanley accounts for over 11% of the average daily volume in the US, better than the 10% of 2 years earlier. This upgrade is expected to increase the market share of Morgan Stanley. In the 1st quarter of 2013, the equities trading revenue of Morgan Stanley was at $1.59 billion marking a decline of 19% from its value from a year earlier, if the accounting charges are excluded.