ESpeed

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ESpeed is an electronic bond trading platform that in July 2013 became part of Nasdaq OMX's Transaction Services business.[1] The deal, which included $750 million in cash and approximately $484 million in stock to be dispersed over 15 years, expanded Nasdaq OMX's business to include the fixed income markets. [2] [3]

eSpeed completed the migration to the NASDAQ OMX Data Center, along with performance engineering enhancements, in May 2014.[4]

History

ESpeed was developed in 1996 by Cantor Fitzgerald, formerly the leading voice broker in the U.S. Treasuries market. In April 2008, eSpeed merged with BGC to create BGC Partners, Inc.

The firm lost 180 of its employees and its global headquarters in downtown New York City in the terrorist attacks on the World Trade Center on September 11, 2001. Two days later, eSpeed handled the majority of the volume when bond trading resumed in the U.S. Its European and Asian services were uninterrupted.[5]

In April 2002, eSpeed settled an agreement with ICE to license its technology for $2 million per year and $0.2 per trade. [6]

In August 2002, eSpeed, The Chicago Mercantile Exchange and Chicago Board of Trade settled a court case in which the Merc and CBOT agreed to pay $15 million each to eSpeed to settle a long-running dispute over the Wagner Patent (United States Patent No. 4,903,201), a patent on automated futures trading systems that is one of the earliest patents in the futures trading technology area.[7][8] eSpeed acquired the patent from Electronic Trading Systems in 2001, and later alleged that CME's Globex and the CBOT's a/c/e electronic platforms violated the patent.[9] Prior to the technology sale to eSpeed, Electronic Trading Systems had filed a law suit against CME and CBOT for infringement; eSpeed assumed the role of plaintiff after purchasing the patent. [10]

On December 22, 2003, eSpeed announced a settlement with New York Mercantile Exchange regarding eSpeed’s Wagner Patent. According the settlement, NYMEX agreed to pay $8 million over three years for the right to use its technology. [11]

In June 2004, eSpeed sued ICAP’s BrokerTec for infringement of its patent on a fixed income trading system. Brokertec denied the infringement and in August accused eSpeed of engaging in “industrial espionage” by unlawfully acquiring a BrokerTec trading manual. [12]

In October 2007, eSpeed was fined $3.5 million for infringement of Trading Technologies’s software patents. [13]

In March 2014, Trading Technologies and Nasdaq OMX announced TT’s connection to NASDAQ OMX eSpeed. The connection was an unusual development, given that TT and eSpeed had had a long-running and nasty dispute over the technology patents.

Products and Services

On March 4, 2014, Trading Technologies International and The NASDAQ OMX Group announced the release of TT’s connection to NASDAQ OMX eSpeed.[14]

ESpeed’s relationship with Trading Technologies is part of a broader efforts to expand distribution to U.S. Treasuries market dealers with services for full lifecycle of global fixed income trading. Espeed reduced round-trip latency by 35% and plans to migrate all connectivity to NASDAQ OMX Data Center in order to provide customers a streamlined co-location strategy, access to other asset classes and technology innovations. [15]

The introduction of this connectivity was first announced in November 2013. [16]

Key People

References

  1. Nasdaq accelerates diversification play with eSpeed buy. The Trade USA.
  2. Nasdaq OMX in $1.2bn deal to buy eSpeed. Financial Times.
  3. Nasdaq OMX Completed Acquisition of eSpeed Platform for Trading of Benchmark U.S. Treasuries. NASDAQ OMX Press Release.
  4. NASDAQ OMX eSpeed Brings World Class Trading Platform and Data Center to U.S. Fixed Income Market. MarketWatch.
  5. eSpeed History. eSpeed.
  6. eSpeed Settles Patent Dispute with CBOT and CME. eSpeed.
  7. eSpeed and New York Mercantile Exchange Reach Settlement Agreement on Wagner Patent. eSpeed.
  8. Automated futures trading exchange US 4903201 A. Google.
  9. CME and CBOT pay $30 million to settle eSpeed software litigation. Finextra.
  10. eSpeed Settles Patent Dispute with CBOT and CME. eSpeed.
  11. eSpeed and New York Mercantile Exchange Reach Settlement Agreement on Wagner Patent. eSpeed.
  12. Trading Technologies Sues eSpeed Over Bond Trading Technology. Law360.
  13. Trading Technologies says wins lawsuit against eSpeed. Reuters.
  14. Trading Technologies Goes Live on NASDAQ OMX eSpeed. BusinessWire.
  15. NASDAQ OMX eSpeed Goes Live on Trading Technologies. Wall Street Journal.
  16. Trading Technologies to Establish Connection to NASDAQ OMX eSpeed. Trading Technology News Release.