by clicking the arrows at the side of the page, or by using the toolbar.
by clicking anywhere on the page.
by dragging the page around when zoomed in.
by clicking anywhere on the page when zoomed in.
web sites or send emails by clicking on hyperlinks.
Email this page to a friend
Search this issue
Index - jump to page or section
Archive - view past issues
Equilend : EquiLend 10th Anniversary
Profile: nervewire www.equilend.com 25 Jamie: I was appointed chief technology officer and we moved the sessions from New York to an amphitheatre hall with stadium seating in Newton, MA. John, Jeff [Jeff Mehlman of NerveWire] and I were, quite literally, on stage in front of the biggest firms in the industry! During that period we hammered out what set of services EquiLend was going to provide across the nine different business processes, which included one-to-one negotiation, AutoBorrow, Contract Comparison and Mark-to-Market Comparison. John: An important feature of the decision-making process was the super-majority concept. No decision could be made without seven of the ten members supporting it. This prevented the six broker-dealers – Goldman Sachs, Morgan Stanley, Merrill Lynch, Bear Stearns, Lehman Brothers and UBS – from ganging up on the lenders – BGI, Northern Trust, J.P. Morgan Chase and State Street – or vice versa. In 90% of cases, we had a unanimous or nine to one vote; in very few did we have seven to three. The most heated debate was certainly over the auction facility: the brokers felt that this would lower the barriers to entry to the industry and that went down eight to two. Jamie: Members also disagreed a good deal over mark-to-market, specifically the size of a movement in the prices of the security that would automatically trigger a change in the collateral required. There was also the question of how automated members wanted to make the one-to-one negotiations. How far did they want to enable an online dialogue between two participants electronically via a mechanism that was secure and able to be audited? John: After the launch we became less involved, helping Dirk Pruis and Ben Glicher to hire the permanent EquiLend team. For the second release of the platform in November 2002, we were doing about 90% of the work to EquiLend’s 10% and by the third release we had built the team and the transition was complete. // NerveWire history 2011 – jamie solomon joins state street 2007 – john Plansky and jamie solomon join booz allen 2003 – nervewire sold to wipro, solomon and Plansky remain 2002 – hands over control to equilend team after third release 2001 – beats sapient and booz allen to contract to develop and build equilend 2000 – engaged by initial group to advise on equilend principle Left: John Plansky, who was ceo of nervewire while the firm was building the equilend platform Jamie: NerveWire was a tiny firm of 180 people competing for the EquiLend contract with Sapient, who employed about 6000 staff, and US giant Booz Allen. But John and I had worked at the major member firms on key projects in a consulting capacity already – me at Goldman Sachs and Merrill Lynch, John at State Street. I’d also put together J.P. Morgan’s first venture into e-commerce, called eSwaps, with the chief technology officer and the chief investment officer there at the time. It’s not like our staff were straight from high school, either; the majority had eight to ten years’ experience at major firms, such as Computer Sciences Corporation, Cambridge Technology and Accenture. John: I was running the financial services division at NerveWire when we won the EquiLend deal; during the build process I became CEO. To be working for the ten leading firms in the industry was a marquee engagement for us and it was a huge deal for a firm of 180 staff. Both elements were central to the capital markets business NerveWire built subsequently, before selling the firm to [Indian outsourcing giant] Wipro in 2003. But the performance clauses gave me a few sleepless nights. Most of the fee was based on the Board’s acceptance of our deliverables, which didn’t happen until EquiLend went live in the summer of 2002. It was daunting having 60 people working on this with payments withheld until the system worked; our Board was interested to know what money was actually coming in! It was daunting having 60 people working on this with payments withheld until the system worked; our Board was interested to know what money was actually coming in!” 8:2 Majority by which EquiLend Board voted against inclusion of auction facility EL.indb 25 26/08/2011 09:57