Single-Dealer Platform
Encyclopedia
A single-dealer platform (SDP) is software used by an investment bank dealing in the capital markets to deliver trading and associated services via the Web. The function of an SDP is to integrate pricing, liquidity, and pre-sales content from multiple sources within a bank and provide access to them via a single user interface
. It is thus both an integration platform
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. An SDP will typically combine elements such as pricing, trading, research and technical analysis
within each asset class, and then draw together multiple asset classes.
Although in principle SDPs are applicable to all types of tradable security
, to date they have been used mainly in OTC
markets such as foreign exchange
and fixed income
.
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.
Early on, however, banks such as Barclays Capital
and Deutsche
began offering single-dealer portals, mostly either via private pages on Bloomberg
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.
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, although in the absence of any established frameworks, early SDPs were usually built in an ad-hoc fashion, using Java applet
s to deliver a user interface via the Web.
(RIA) technologies for delivery. There is currently considerable debate over which RIA technology is most appropriate for SDP delivery, with native Web application
s, Flash
and Silverlight all attracting adherents.
At the same time, banks have begun to employ SDP frameworks such as Caplin Xaqua to speed development and integrate multiple asset classes.
After a period in 2006-2009 in which SDPs appeared to be giving way to multi-dealer platforms, especially in fixed income markets, their use is now growing rapidly across many asset classes.
User interface
The user interface, in the industrial design field of human–machine interaction, is the space where interaction between humans and machines occurs. The goal of interaction between a human and a machine at the user interface is effective operation and control of the machine, and feedback from the...
. It is thus both an integration platform
Integration platform
An Integration Platform is defined as a computer software which integrates different applications and services. It differentiates itself from the Enterprise application integration which has a focus on supply chain management...
and a delivery platform
Content Delivery Platform
A content delivery platform is a software as a service content service, similar to a content management system , that utilizes embedded software code to deliver web content...
.
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. An SDP will typically combine elements such as pricing, trading, research and technical analysis
Technical analysis
In finance, technical analysis is security analysis discipline for forecasting the direction of prices through the study of past market data, primarily price and volume. Behavioral economics and quantitative analysis incorporate technical analysis, which being an aspect of active management stands...
within each asset class, and then draw together multiple asset classes.
Although in principle SDPs are applicable to all types of tradable security
Security (finance)
A security is generally a fungible, negotiable financial instrument representing financial value. Securities are broadly categorized into:* debt securities ,* equity securities, e.g., common stocks; and,...
, to date they have been used mainly in OTC
Over-the-counter (finance)
Within the derivatives markets, many products are traded through exchanges. An exchange has the benefit of facilitating liquidity and also mitigates all credit risk concerning the default of a member of the exchange. Products traded on the exchange must be well standardised to transparent trading....
markets such as foreign exchange
Foreign exchange market
The foreign exchange market is a global, worldwide decentralized financial market for trading currencies. Financial centers around the world function as anchors of trading between a wide range of different types of buyers and sellers around the clock, with the exception of weekends...
and fixed income
Fixed income
Fixed income refers to any type of investment that is not equity, which obligates the borrower/issuer to make payments on a fixed schedule, even if the number of the payments may be variable....
.
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 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, that were formed to deliver pricing and trading from multiple banks.Early on, however, banks such as Barclays Capital
Barclays Capital
Barclays Capital is a global British investment bank. It is the investment banking division of Barclays plc which has a balance sheet of over £1.2 trillion . Barclays Capital provides financing and risk management services to large companies, institutions and government clients. It is a primary...
and Deutsche
Deutsche Bank
Deutsche Bank AG is a global financial service company with its headquarters in Frankfurt, Germany. It employs more than 100,000 people in over 70 countries, and has a large presence in Europe, the Americas, Asia Pacific and the emerging markets...
began offering single-dealer portals, mostly either via private pages on Bloomberg
Bloomberg L.P.
Bloomberg L.P. is an American privately held financial software, media, and data company. Bloomberg makes up one third of the $16 billion global financial data market with estimated revenue of $6.9 billion. Bloomberg L.P...
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.
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, although in the absence of any established frameworks, early SDPs were usually built in an ad-hoc fashion, using Java applet
Java applet
A Java applet is an applet delivered to users in the form of Java bytecode. Java applets can run in a Web browser using a Java Virtual Machine , or in Sun's AppletViewer, a stand-alone tool for testing applets...
s to deliver a user interface via the Web.
Current practise
In recent years the use of Java applets has declined sharply, and the focus has shifted to Rich Internet ApplicationRich Internet application
A Rich Internet Application is a Web application that has many of the characteristics of desktop application software, typically delivered either by way of a site-specific browser, via a browser plug-in, independent sandboxes, extensive use of JavaScript, or virtual machines...
(RIA) technologies for delivery. There is currently considerable debate over which RIA technology is most appropriate for SDP delivery, with native Web application
Web application
A web application is an application that is accessed over a network such as the Internet or an intranet. The term may also mean a computer software application that is coded in a browser-supported language and reliant on a common web browser to render the application executable.Web applications are...
s, Flash
Adobe Flash
Adobe Flash is a multimedia platform used to add animation, video, and interactivity to web pages. Flash is frequently used for advertisements, games and flash animations for broadcast...
and Silverlight all attracting adherents.
At the same time, banks have begun to employ SDP frameworks such as Caplin Xaqua to speed development and integrate multiple asset classes.
After a period in 2006-2009 in which SDPs appeared to be giving way to multi-dealer platforms, especially in fixed income markets, their use is now growing rapidly across many asset classes.
See also
- Electronic trading platformElectronic trading platformIn finance, an Electronic trading platform is a computer system that can be used to place orders for financial products over a network with a financial intermediary. This includes products such as shares, bonds, currencies, commodities and derivatives with a financial intermediary, such as a...
- Electronic tradingElectronic tradingElectronic trading, sometimes called etrading, is a method of trading securities , foreign exchange or financial derivatives electronically...
- Electronic Communication NetworkElectronic Communication NetworkAn electronic communication network is the term used in financial circles for a type of computer system that facilitates trading of financial products outside of stock exchanges. The primary products that are traded on ECNs are stocks and currencies. The first ECN, Instinet, was created in 1969...
(ECN) - Retail forex platformRetail forex platformRetail foreign exchange trading is a small segment of the large foreign exchange market. In 2007 it had been speculated that volume from retail foreign exchange trading represents 5 percent of the whole foreign exchange market which amounts to $50–100 billion in daily trading turnover. The retail...
- Stock market data systemsStock market data systemsStock market data systems communicated market data—information about securities and stock trades—from stock exchanges to stock brokers and stock traders.-History:...
- Straight Through ProcessingStraight Through ProcessingStraight-through processing enables the entire trade process for capital markets and payment transactions to be conducted electronically without the need for re-keying or manual intervention, subject to legal and regulatory restrictions...
(STP) - Trading system
- Trading roomTrading roomA 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 a open outcry stock exchange....