A Brokerage Firm's It Infrastructure?

[dpictureq]

I have been thinking about opening a brokerage firm and have done a lot of research but just couldn’t find anything about the computer/IT infrastructure of a brokerage firm. I need to know what are the computer/software requirements, in details, for a brokerage firm to run properly. Ie. Individual clearing, trading system, servers, datacenter. I just want a rough idea before I hire an IT technician.

I would really appreciate if you can provide me the answer or any website. Thank you
:?:

 

[0007]

I have been thinking about opening a brokerage firm and have done a lot of research but just couldn’t find anything about the computer/IT infrastructure of a brokerage firm. I need to know what are the computer/software requirements, in details, for a brokerage firm to run properly. Ie. Individual clearing, trading system, servers, datacenter. I just want a rough idea before I hire an IT technician.

I would really appreciate if you can provide me the answer or any website. Thank you
:?:

I admire your ambition but would you do business with a brokerage whose Principal is unaware of the IT requirements for that business?

 

[ns1000]

I have been thinking about opening a brokerage firm and have done a lot of research but just couldn’t find anything about the computer/IT infrastructure of a brokerage firm. I need to know what are the computer/software requirements, in details, for a brokerage firm to run properly. Ie. Individual clearing, trading system, servers, datacenter. I just want a rough idea before I hire an IT technician.

I would really appreciate if you can provide me the answer or any website. Thank you
:?:

It's a completely open question. It depends on how you're looking to execute trades, what products etc etc. At the one end, you can do everything by hand with paper tickets; there is no legislation in the UK stating that you have to have electronic storage. Of course, I doubt you'll attract many customers like that. At teh other end of the spectrum you'll need an execution platform, databases storing client details, positions, funds, KYC documents. You'll need software to check accounts and route orders through to a clearing member, software to generate position reports, statements, trade confirmations, capital used, reconcile payments in and out, some sort of online payment solution, maybe credit checking, an interface to your custodian. It all depends what you want, what jurisdiction you're operating in and what products you're offering.

Going to be expensive though...
You may find some sort of white label

 

[0007]

I think that's a bit harsh myself. I don't know everything that goes on at my firm, and I am fairly senior. There are experts in all sorts of stuff here (including IT infrastructure). If I were to start from scratch I woul have to hire someone for that side of things. I know that in our server room there's a truckload of kit connected by an obscene amount of wires. And when it doesn't work I know very little about what to do.

But equally the guy in the server room would very likely make a big hash of things if he had to buy a few hundred million usd/jpy.

GJ

Gamma,

Ok, you're probably right. perhaps i didn't make my point very well.

What I'm trying to indicate is that I would expect someone who intends to set up a brokerage woulod presumably have some kind of experience of the working environment. Thus he would already have contact with those in the know - the danger of asking on this forum is that there is both very good and sometimes, not so good advice.
If you aren't qualified to differentiate, then you could soon end up with problems big time - especially when hiring IT staff: these people can (sometimes) run rings round you if you can't speak on their level - I've seen it happen. So my thoughts were as much with our would-be broker as with the customers (who will soon leave if it doesn't work).

So apologies to all - I do realise we all have to start somewhere but I just get a bit worried when such an expensive and serious business as financial broking is contemplated in (the apparent and possibly misunderstood by me) terms of the post.

 

[grantx]

GJ,

"I am fairly senior". I'm glad you didn't say, "I am fairly superior". Bad form.

Grant.

 

[abottoml]

This is a big topic really, but here's my 2p ...

(I'll ignore the front-end apps and trading platforms which is a huge area with plenty of variables, but it should be noted that the selection of which software packages and solutions you choose will dictate the spec and quantity of your application servers. So I will only comment on the IT infracture excluding these app servers...)

This is the kind of back-end IT infrastructure a quality UK-based broker/dealer with about 10-20 staff would have:-

Servers: A pair of redundant HP Proliant DL380 servers running Windows Server 2008 or something equivalent. You might want to splash out on a backup solution like EMC Legato or Veritas NetBackup.

Messaging: Microsoft Exchange Server 2007. You could throw in a bunch of Blackberries for the big wigs too perhaps.

LAN infrastructure: Two or three stackable 24 port Cisco 3750 switches should do you nicely. Dual-monitor Dell PCs for everyone. Use them with Windows XP Pro, not Vista. Cat5e UTP cabling will need to be patched up everywhere for the phones and PCs - You will need a cabling contractor. PCs usually plug into the back of phones these days which helps.

WAN & comms: A 512k network service from BT Radianz (BT Radianz: A Revolution in Connectivity) to connect to the financial world at large. A 2Mb ADSL/SDSL internet connection (ISPreview UK - Independent Internet Service Provider Information Source) with static IP addressing for surfing, email, and hosting a website. Also chuck in an ISDN30 for the phone system - No firms use VoIP yet.

IT Security: Antivirus everywhere (try Symantec perhaps), and a pair of IP390 Nokia / Checkpoint firewalls to filter traffic in and out of the network. Do not use a Microsoft-based firewall. The FSA also likes to see IDS systems in use too, but they're effectively a waste of money IMHO.

Remote Access for home working: Cisco 3000 series VPN Concentrators are nice and easy to use with laptops. Lots of places use Citrix for remote access when there are no laptops, but it's quite pricey.

Phones: An Avaya IP phone system is good value and are dependable.

Redundancy / DR: If you're looking after other peoples' money, everything needs to be backed up and duplicated. This doubles the cost of everything, and makes it all three times more complicated to run. For offsite space and power for your hardware, check out SunGard: Home Page.

Setting it all up: Hire an experienced network contractor for 2-3 months to set up the voice and data comms, and a Microsoft person for 3-6 months for all the email, home drives, AV, and general PC stuff. Get them to write comprehensive but simplified support docs so the receptionist can support it all once they're gone.

This is only one possible set of solutions from the top of my head, but it gives an idea of what a small-but-serious IT infrastructure could consist of. It could cost £40-100k or so ....

 

[grantx]

Abbot,

Ever thought of becoming an equities salesman? Your outline sounds impressive, is well presented and persuasive, and I don't understand a word of it. You'd make a fortune.

Grant.

 

[dcraig1]

This is only one possible set of solutions from the top of my head, but it gives an idea of what a small-but-serious IT infrastructure could consist of. It could cost £40-100k or so ....

Probably a lot more when you add in the "guts" - order routing, real time data distribution, back office, compliance etc etc. I don't really know, but I would guess you could easily be talking another order of magnitude or more - maybe lots more. I would guess that there would be significant costs in connecting to each and every exchange in terms of compatibility testing/certification and so on.

Just hiring an "IT tech" wouldn't cut it. You would need at least a very good system admin, almost certainly with experience of exchange data feeds and order routing.

I really can't see 100K being anywhere near enough.

 

[icel-cambridge]

Trading Solutions

You might be interested we have our own commodity derivative trading solutions. It is an end to end solution for derivative exchanges - trading, exchange administration and clearing house operation. Let me know your thoughts on this and I can give you the product profile soon..

Thanks,

I have been thinking about opening a brokerage firm and have done a lot of research but just couldn’t find anything about the computer/IT infrastructure of a brokerage firm. I need to know what are the computer/software requirements, in details, for a brokerage firm to run properly. Ie. Individual clearing, trading system, servers, datacenter. I just want a rough idea before I hire an IT technician.

I would really appreciate if you can provide me the answer or any website. Thank you
:?:

 

[normbeef]

I have been thinking about opening a brokerage firm and have done a lot of research but just couldn’t find anything about the computer/IT infrastructure of a brokerage firm. I need to know what are the computer/software requirements, in details, for a brokerage firm to run properly. Ie. Individual clearing, trading system, servers, datacenter. I just want a rough idea before I hire an IT technician.

I would really appreciate if you can provide me the answer or any website. Thank you
:?:

This all sounds quite exciting.. I hoe your going to keep the forum updated with how you get on..

I might be teaching you how to suck eggs here.. but surely you must be writing some kind of business plan with projections and an idea of how big your business will be when you start it ..and how it might grow over time... this should inform your choice of IT infrastructure (not the other way around)

IT investment can be VERY heavy if you are buying the wrong solution to your business needs, or you get 1 year down the road and find out that your system is not scalable.. Basically.. each of your business questions should have an IT answer to it ... & and cost implication and a future projection.

Specifying kit and connectivity is a stab in the dark at this stage...

If your serious then you might be better hiring a consultant for a few days to go through your business plan and advise on the best way forward... in the long run it could save you an enormous amount

 

[grantx]

Mr Beef,

What's wrong with PC World?

Grant.

 

[normbeef]

Mr Beef,

What's wrong with PC World?

Grant.

nothing... i bought my entire trading infrastructure there (my laptop).... Actually the business section if not too bad.. its the spotty teenage no-nothings in the retail bit that I cant deal with...

 

[grantx]

Mr Beef,

Hope they didn't sell you an end of line model and a 5-year warranty on a washing machine. I don't trust the fcks.

Grant.

 

[normbeef]

Mr Beef,

Hope they didn't sell you an end of line model and a 5-year warranty on a washing machine. I don't trust the fcks.

Grant.

mmm. neither do I... I usally build my own systems... but I also used to fix my own car and I just cant be bothered anymore ...

I wouldnt buy a warranty of anybody for anything... I underwrite my own losses thanks..

 

[soniabvc]

Interesting post...too bad it has been dead for over a year now.

Did you manage to open your brokerage firn?

 

[charliechan]

entry level broker: white label a spread betting engine from one of the big players like cmc, ig, etc. i 'think' you can pretty much outsource everything to these people. all you have to do is go out and find customers, and share a split with the provider. think of your self as a commission only salesman - who also has the overhead of advertising (shilling on websites like this is usually a cheap and popular option - using a different login of course and telling everyone what a great outfit this company you just opened an account with is or similar).

as spread betting is less tightly regulated, and offers more chances to fleece customers, it probably offers quicker returns with less grief/regulation than a more honest, i mean regulated broker offering access to real markets.

if you do well and reinvest, then you can buy the data centres, fidessa infrastructure, global offices, and of course a nice little 25 yr old dolly from bromley who aspired to page 3 but got to be your pa by accident.

good luck!