A new gateway
"Both GATElab and LSEG share a number of key values and qualities, not least of which is innovation".
Stefano Falciani, GATElab Ltd MD
Technology specialist GATElab delivers brokerage and proprietary trading platforms, providing solutions to customers including banks, institutional investors, hedge funds and exchanges. It became part of LSEG in 2013. John Beck reports.
GATElab is one of the newest additions to London Stock Exchange Group (LSEG), joining in February 2013 after selling a majority stake to the Group. It has a long history in its home market of Italy, however. Established in 1989, it has spent more than 20 years providing customers with products and solutions to meet their electronic trading needs.
Back in 1991, the Italian Treasury and Bank of Italy decided to electronify the country’s governement bond markets. The decision was taken well before most other countries in the world and GATElab was involved from the start, providing its Italian customer base with an electronic trading platform
Over timewe introduced additional business intelligence over the basic initial configuration of the platform , adding features such as pricing and quoting systems, position keeping and risk monitoring systems in real time,” says Stefano Falciani,GATElab Ltd MD.
Since then, the company has developed a suite of multi-asset, cross-market trading components aimed at buy and sell-side customers. These span the full spectrum of pre-trade and trade execution tools.
“We are currently working on improving the functionalities of these products, with a particular concentration on ultra-low latency solutions for equities and derivatives, multi asset class algo solutions plus a comprehensive fixed income trading platform.” says Falciani.
GATElab is also broadening its geographical scope. Russian bank Renaissance Capital, one of the country’s biggest brokers, is now using GATElab’s pre-trade risk gateways to connect their customers to the Moscow Exchange Cash equity, derivatives and Forex markets, with a cross asset margining solution on top that increases their customers capital efficiency , allowing them to cover all Russian liquidity and LSEG International Order Book (IOB) stocks through a single consolidated account.
Another Tier 1 institution will soon deploy in production a ultra low latency pre- trade risk software adapter on the NSE, derivatives Indian market, where GATElab implements a full suite of risk protocols, including SPAN methodology to check option pricing, keeping the latency at a level never seen before
“We are developing these ultra low latency gateways in what we were defining only a couple of years ago as developing countries,and this seems a quite established path” says Falciani.
Two other topics are coming to the fore in GATElab’s discussions with customers – its algorithmic trading engine and Smart Order Routing system. The algo trading engine is both powerful and completely integrated into its trading platform.
“Our solution is particularly trader-friendly, as it allows users to trade and implement algorithmic strategies from the same interface with only limited involvement from their IT department. This is a key differentiator, because it can very much lower the time to market of every new strategy. It is of particular importance as we are in an environment which changes so quickly and our customers might have to change their trading logic to react,” says Falciani.
GATElab’s Smart Order Routing system, meanwhile, is also based on advanced algorithms, which run ‘under the hood’ governing routing logic. Users include Banca IMI, which is currently employing GATElab technology to connect to OTC bond markets and log evidence of best executions.
The range of technologies is beneficial not just to GATElab but also to LSEG, broadening and complementing the Group’s capabilities.
“The synergies with the LSEG are quite obvious, as the numerous members of the various markets might find one of our solutions beneficial to them and this may lead to a revenue stream increase for the Group’ ” says Falciani.
The alliance should also allow GATElab to benefit from LSEG’s international scope, an important consideration given that its customer base is currently based primarily in Italy.
The group had begun looking further afield before it became a part of LSEG, however. In fact, Falciani joined GATElab as it established its UK operations.
“We started to level up the business internationally then, but of course we expect to have a big boost in this direction because we now belong to an international group like LSEG,” he says.
Joining LSEG’s broad stable of companies is clearly advantageous as GATElab can now work alongside providers of a range of different products, such as Millennium IT or UnaVista, to satisfy all the requirements of LSEG customers.
“This is one of the fields in which we are making real progress,” says Falciani. “To implement our technology with complimentary parts of the Group and satisfy all the needs of financial companies, front to back. We are in conversationwith the other technological companies of the group in order to integrate our solutions and be able to cover completely the needs of our financial companies with best of breed solutions.”
GATElab relocated its offices to LSEG headquarters in April 2013, a move that has allowed it to become closer to some of its peers and better understand the needs of their customers, “Now, my office is in London Stock Exchange, so I’m a lot closer to our customers and some of our counterparts - one of which was once LSEG,” explains Falciani.
At a more fundamental level, both GATElab and LSEG share a number of key values and qualities, not least innovation, which is central to the Italian firm’s ethos and LSEG’s.
“We are and we have always been really innovative in our solutions. It is in our DNA and LSEG’s DNA, so this was a perfect marriage, and we are very proud to be part of the Group” says Falciani.