DTCC, Markit to Create Single Point of Derivatives Confirmation

Washington's calls for efficient, automated processing of over-the-counter (OTC) derivatives has grown to a clamor that vendors and Wall Street firms can't ignore. Just today, Acting Under Secretary for Domestic Finance Anthony Ryan said, "With respect to market infrastructure, we are encouraging the development of an integrated operational infrastructure for the OTC derivatives market that ensures accuracy and timeliness of trade data submission, resolution of trade matching errors, and integrated processing. We are calling for a cash settlement protocol adopted by market participants and incorporated into standard documentation, and for netting, novation and clearing of OTC derivatives contracts by a centralized counterparty."

In answer to this demand -- an echo of earlier statements made by Alan Greenspan and Ben Bernanke -- the DTCC and Markit announced today the formation of a new company that will combine Markit's front- and middle-office trade processing services with DTCC Deriv/SERV's back-office post-trade confirmation and matching services, providing a single gateway for confirming OTC derivative transactions globally. Buy-side and sell-side OTC derivative market participants will be able to confirm trades and to gain access to additional services provided by Markit and DTCC through a common portal.

Industry observers responded favorably to today's announcement. "Buy-side firms are not keen to patch together a network of internal and external communication networks and systems, and have been waiting for a major dealer-backed solution," said Denise Valentine, Aite Group senior analyst. "Two dealer-backed entities " in the form of Markit and DTCC " have responded to the buy-side demand and have created a new entity to further the cause of automation and simplification."

And analysts at the Tower Group said, "This partnership will prove to be a critical turning point in the development of a single, global operating infrastructure for the full range of OTC derivatives. The combination of Markit Wire and Deriv/SERV addresses the inefficiencies associated with the current fragmented confirmations landscape, reduces the likelihood of radical regulatory intervention, and eases the strain on industry middle and back offices. Although broker dealers may be concerned that one organization now has monopoly power in OTC confirmations, TowerGroup anticipates that the governance structure will allow the industry to continue to influence the direction of the partnership. TowerGroup expects the partnership will yield a central data repository that can be the springboard for multiple new products, such as portfolio reconciliation and collateral management services."

The new company will comprise Markit's recently acquired Markit Wire platform (formerly SwapsWire) as well as its other trade processing services such as Markit Trade Manager, Markit Tie Out and Markit PortRec. DTCC will contribute its Deriv/SERV matching and confirmation engine and its AffirmXpress, MCA Xpress and Novation Consent services. Additional services that will not become part of the new company include Markit's data and valuation services and DTCC's downstream Trade Information Warehouse, centralized settlement and payment netting services.

This initiative may accelerate the adoption of electronic processing solutions across the rapidly growing, $454 trillion OTC derivative market where approximately 50% of transactions are still confirmed on paper.

The new company will be jointly owned by DTCC and Markit, and will be governed by an 11-member board of directors. Michael Bodson, executive managing director for DTCC's business management and strategy overseeing all DTCC business lines, will be chairman of the new company. Jeff Gooch, executive vice president of Markit, will be the new company's chief executive officer.

In addition to facilitating greater industry adoption of electronic confirmation, the new company will offer automated trade affirmation, trade allocation and novation consent solutions to the market on a cross-product basis. It will initially support both DTCC's and Markit's confirmation platforms.

The new company will be headquartered in London, with a second major centre of operations in New York City and representative offices in Europe and Asia. The combined business will have over 1,100 financial institutions as customers and annual transaction volumes of over 7 million across the OTC interest rate, credit and equity derivative markets.

The DTCC-Markit agreement will become effective following completion of due diligence, regulatory filings and approval by relevant global regulators, including those in the U.K. and U.S. The name of the new company will be announced at a later date.

NYSE Brokers to Receive Algo Trading Software

Pragma Financial Systems announced today that it has partnered with NYSE Euronext to provide algorithmic trading tools to New York Stock Exchange floor brokers.

This will mark the first time the NYSE community has algorithmic execution tools available on the trading floor.

The partnership is the latest in a series of moves by NYSE Euronext to provide the floor community with technology suited to better compete in an increasingly electronic national marking system. This step is intended to help NYSE Euronext's distinctive hybrid market model to continue to support a floor presence.

The new algorithmic strategies are customizable and will trade on parity, providing brokers with the ability to match on every trade. The NYSE will gradually roll out the new algorithms during the next several weeks.

Mexican Exchange Upgrades Trading Platform

RTS Realtime Systems Group, a trading solutions provider, announced today that MexDer, the Mexican Derivatives Exchange, has selected RTS to provide the next generation front-end for its electronic trading platform.

The agreement includes distribution of trading screens to MexDer local members including market makers, brokers and clearing firms.

RTS will provide its suite of trading solutions, including the high-performance trading platform, the RTD Realtime Trading Desktop, and the white-label version of RTS' web-based front-end, eRTD.

"We have been taking enormous steps to facilitate international access to our markets," said Jorge Alegria, chief executive officer of MexDer. Our products are really benchmarks not only for Mexico, but for the Latin American region as a whole, and we believe this next generation front-end will further our global growth potential."

Wall Street News Alert: Breaking News Alert - EENR! July 23, 2008

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NOTE TO EDITORS: The Following Is an Investment Opinion Being Issued by Wall Street Capital Funding.

WESTON, FL -- (MARKET WIRE) -- 07/23/08 -- Wall Street News Alert's "stocks to watch" this morning are: Exterra Energy Incorporated (EENR), Microsoft (MSFT), Exxon Mobil Corporation (XOM) and Chesapeake Energy Corporation (CHK).

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Exterra Energy Inc. (EENR) has just issued positive news and investors looking to possibly benefit from the energy sector should continue monitoring the stock closely! Yesterday after the markets closed, the company issued a press release announcing the successful fracture stimulation of the RSK-Star #6 well on June 18, 2008.

This good news for the company! According to the press release, on June 24th, the well commenced gas sales at 550 Mcf per day on a 24/64" choke. Production flow is up the casing due to tubing shortages. As of July 21st, gas sales have stabilized at approximately 320 Mcf per day with a flowing casing pressure of 350 psi on a 30/64" choke. The installation of production tubing is planned which will allow the continued recovery of frac fluids and enhance the daily gas rates.

Exterra Energy owns a 21.1% Working Interest (15.61% Net Revenue Interest) in the RSK-Star #6. The RSK-Star lease consists of 264.9 acres with six (6) producing Barnett Shale gas wells. Exterra owns varying working interest in each of those six producing wells. Three (3) additional Barnett Shale drill sites have been identified, which were delineated by a 3D seismic survey over the acreage.

"The successful fracing of the RSK-Star#6 well is a key component of Exterra's continued operations within the core area of the North Texas Barnet Shale gas field," stated CEO John Punzo. "The Barnett Shale gas field is undoubtedly one of the largest producing gas fields in the continental U.S. today, and Exterra is committed to developing and expanding its acreage and assets within the core area of the field."

Investors are urged to continue to monitor the progress of the company!

The stock closed Tuesday at Thirty cents a share.

For Wall Street News Alert's in-depth profile of Exterra Energy Inc., visit http://www.WallStreetNewsAlert.com/HotStocks/EENR072208/default.aspx.

Microsoft (MSFT) up 0.6% on 88.6 million shares traded. Founded in 1975, Microsoft is the worldwide leader in software, services and solutions that help people and businesses realize their full potential.

Exxon Mobil Corporation (XOM) down 0.1% on 27.9 million shares traded. Exxon Mobil Corporation engages in the exploration, production, transportation and sale of crude oil and natural gas.

Chesapeake Energy Corporation (CHK) down 8.4% on 28.2 million shares traded. Chesapeake Energy Corporation is the third-largest producer of natural gas in the U.S. Headquartered in Oklahoma City, the company's operations are focused on exploratory and developmental drilling and corporate and property acquisitions in the Fort Worth Barnett Shale, Fayetteville Shale, Haynesville Shale, Mid-Continent, Appalachian Basin, Permian Basin, Delaware Basin, South Texas, Texas Gulf Coast and Ark-La-Tex regions of the United States.

Market Commentary:

"Crude's decline weighed on gold prices Tuesday, with the August contract falling $17.20 to $946.50 an ounce on the New York Mercantile Exchange after earlier dipping to $942.10," stated Sonja Rudd in Wall Street News Alert's daily commentary continued at: http://www.WallStreetNewsAlert.com.

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Microsoft Announces Reorganization of Windows and Online Services Business

REDMOND, Wash., July 23 /PRNewswire-FirstCall/ -- Microsoft Corp. today announced that the Platforms & Services Division (PSD) will be split into two groups: Windows/Windows Live and Online Services, with both groups reporting directly to CEO Steve Ballmer. Microsoft also announced that PSD President Kevin Johnson will be leaving the company. Johnson will work to ensure a smooth transition.

(Logo: http://www.newscom.com/cgi-bin/prnh/20000822/MSFTLOGO)

"Kevin has built a supremely talented organization and laid the foundation for the future success of Windows and our Online Services Business. This new structure will give us more agility and focus in two very competitive arenas," Ballmer said. "It has been a pleasure to work with Kevin, and we wish him well in the future."

Effective immediately, senior vice presidents Steven Sinofsky, Jon DeVaan and Bill Veghte will report directly to Ballmer to lead Windows/Windows Live. The Windows organization recently announced strong annual sales, with more than 180 million copies of Windows Vista sold globally, and it has driven more than 100 million installs of its Windows Live suite. The organization's innovation pipeline includes a new version of Windows Internet Explorer, the next version of Windows and the next generation of the Windows Live product suite.

In the Online Services Business, Microsoft will create a new senior lead position and will conduct a search that will span internal and external candidates. In the meantime, Senior Vice President Satya Nadella will continue to lead Microsoft's search, MSN and ad platform engineering efforts. Microsoft recently announced a strategy to redefine search through innovations in the user experience and business models. As an example, the company's cashback search program, announced in May, is already generating strong momentum among online shoppers and advertisers.

In addition, Senior Vice President Brian McAndrews will continue to lead the Advertiser & Publisher Solutions Group (APS). APS has great momentum, having signed more than 100 new publisher deals in the past year. McAndrews will continue to focus on the display advertising opportunity for Microsoft, driving execution and integration of advertising assets, including recent acquisitions such as Massive Inc., Navic Networks, ScreenTonic SA and YaData Ltd.

"Our Windows business is firing on all cylinders," Ballmer said. "We see tremendous opportunity in search and advertising, and we have a clear strategy for investing in success today and growth in the future."

"Microsoft is a special place and presents opportunity to so many," Johnson said. "I have been so fortunate to have experienced 16 amazing years of building Microsoft's business, learning from great leaders in the company and working with phenomenally talented people."

Founded in 1975, Microsoft (MSFT) is the worldwide leader in software, services and solutions that help people and businesses realize their full potential.

SOURCE Microsoft Corp.



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Caption Writer: KS

Industry Moves: Vibrant Media Staffs Up, 4DS Restructures

Vibrant: Vibrant Media, ad ad company responsible for those double-underlined in-line text ads, has hired Microsoft (NSDQ: MSFT) Advertising’s Jonathan Baron to be its new international sales VP and Google’s (NSDQ: GOOG) Carl Jordan to be its new European director of publishing solutions. The firm, which also does video ads, said it doubled its London staff in the last six month to service a growing Russian, eastern European and Asian market.

-- 4DS: Matt Gower, head of Channel 4’s team that sells ads across third-party websites, is leaving to set up his own venture as part of a restructure. Rather logically, C4 is merging 4DS with the team that sells online ads on its own sites, with the new team to be headed by new media advertising Errol Baran

Mossberg On MobileMe: Too Flawed To Recommend; Pogue: Apple Doesn’t Have A Clue

Forget the launch woes ... Walt Mossberg has spent the last week testing Apple’s (NSDQ: AAPL) new MobileMe service and finds it so flawed he can’t recommend it as is. In his weekly column, Mossberg writes: “It’s a great idea, but, as of now, MobileMe has too many flaws to keep its promises.”

The server overload and email outages that marred the launch have “eased considerably” but these problems are “systemic.” MobileMe, viewed here as a possible killer app, is supposed to support syncing email, bookmarks, calendar info and address books on multiple computers, the iPhone and the iTouch via Mac or Windows. But it didn’t work that way for Mossberg; see the column for details like disappearing email, unsynced bookmarks, missing contact info and more.

His conclusion: “Apple patiently explained each of my problems, sometimes helping me with workarounds, sometimes claiming they were rare, other times saying that it was working on fixes. If Apple does get MobileMe working smoothly, it could be a terrific service. But it’s way too ragged now.”

Sounds like killer-app status is still in the distance.

Update: Not matter how MobileMe turns out, Apple has lost some of its customer service mojo and product launch cred…

More after the jump, including Mossberg’s MobileMe video

David Pogue’s MobileMe is working just fine now—except for that small lack of the promised instant syncing—but he’s taking Apple to task for the way it’s treating those who are having problems (like the woman whose entire email archives were wiped out of multiple locations with Apple able to only recover 43 messages) and for the way it’s handled the whole mess: “But the real problem is how Apple is responding. For a company that’s so brilliant at marketing, it seems to have absolutely no clue about crisis management.” He reports on the limited “official statement” from PR and the terse online notice about problems.

Pogue’s conclusion: “It’s amazing that Apple doesn’t recognize this situation. This is an airplane that’s stuck on the runway for hours with no food or working bathroom. And the pilot doesn’t come on the P.A. system to tell the customers what the problem is, what’s being done to fix it, how much longer they might be stuck, and how he empathizes with their plight. Instead, he comes on once every three hours to repeat the same thing: ‘We apologize for the inconvenience.’ MobileMess, indeed.”