Rapa's experience includes: strategic planning, business continuity planning, in-depth knowledge of the workings of the worldwide capital markets industry, network computing and technology consulting to the global capital markets arena. He has expertise and knowledge in equity, options and futures exchanges and been associated with a number of exchange automation and e-commerce projects in the past 15 years.
After several high-profile market disturbances, from the 2010 “flash crash” to the Knight Capital algorithmic meltdown in 2012, the SEC considered a new set of rules to tighten up system compliance and integrity. The rules, known collectively as “Reg SCI” became effective in February 2015. John Rapa, president and CEO of Tellefsen & Company and a 30-year veteran consultant to exchange market structure, walks us through the new rules and what they mean for exchanges, dark pools and market participants.
Project Experience and Highlights
Conducted a technology and operations impact analysis review of a major global investment bank’s OTC derivatives trading operations for Dodd-Frank Act Title VII compliance. Reviewed OTC derivatives business flow, systems infrastructure, operations work streams and identified the major Dodd-Frank touch points. Produced a road map and presented to executive management committee.
Designed, developed and implemented Business Continuity and Disaster Recovery plans and strategies for various U.S. financial services firms. Project work included project management, risk assessment analysis, business impact analysis, BC/DR strategy development, emergency response and operational assessment, definition and development of plan components, incident management team structure and development, emergency contact management/communications, etc.
Expert witness for the defense in an arbitration case between a U.S. options exchange and a major provider of exchange technologies. Reviewed various case documentation, developed time line of events from case documents, developed expert witness report, rebuttals and provided expert witness testimony to arbitration tribunal. Case was awarded to the defense.
Managed the project team that conducted a business continuity forensic risk review of a global hedge fund administrator. Review consisted of interviews with hedge fund clients, fund administrator management, site review and analysis of a data center that experienced an outage from a significant business disruption. The project consisted of a ”pathology” review of the events that occurred and actions that followed the service and systems disruption. Produced a thorough risk assessment analysis report with specific recommendations and presented to senior management.
Developed the functional requirements and requests for proposals for two U.S. based futures exchanges for Electronic Order Routing and Order Book Management systems. Developed target list of vendors, issued the RFP, developed objective evaluation criteria and managed the responses/selection of the vendor.
Developed the functional requirements for an Options Settlement Calculator application for a major commodity futures clearing corporation. Documented the end user requirements, reviewed common options pricing models in use by other clearing organizations, pre-qualified a number of software providers and developed the request for proposal document.
Managed the team that conducted a market research survey into technical alternatives for options market data dissemination for an options industry processor. Segmented the market, developed survey questionnaires, polled key options trading firms, broker dealers, order flow providers and market data vendors on their views about alternatives for receiving U.S. options market data information.
Directed the team that conducted an evaluation of market data ticker plant application software vendors for the largest U.S. equity exchange. Segmented vendor candidates, met with/reviewed their offerings/technology platforms/financials, developed comparative matrices of strengths/weaknesses, analyzed vendors and presented recommendations to management.
Conducted an analysis of major U.S. equity and derivatives exchanges’ market data systems and businesses for a major international systems integrator. The analysis included a review of three exchanges technology architecture, their business model for market information, market information offerings, information vendor channels, market data revenues and future plans.
Lead the team that conducted a market research survey of the technology directions of foreign exchange trading systems for a major foreign exchange ECN. Segmented the market, conducted competitive analysis, developed survey questionnaires and polled FX traders and senior management at various global money center banks, hedge funds, proprietary trading firms and asset managers on their views of technology requirements for a next generation of FX trading systems.
Co-developed the strategic business requirements for a global clearing system for a major Asian equity and derivatives exchange. Developed an industry best practices evaluation, gathered requirements from internal clearing house users, external clearing members and developed/designed the overall strategic business and technology requirements. Aligned the clearing strategy with the exchange’s corporate strategy. Presented the strategy to the senior management.
Managed the business and technology requirements for a new trading floor for a boutique investment bank. Evaluated application vendors and desktop technologies, conducted vendor evaluation and selection, coordinated application and technology integration, etc. Developed and managed the overall requirements, project plan and budget, design documents and implementation. Technologies included the telephone switch, desktop workstations and servers, switches, routers, keyboard/video/monitor switches, flat panel monitors, etc.
As Interim Chief Operating Officer, managed the business development, legal and regulatory issues associated with the launch of a new screen based financial futures exchange. Coordinated regulatory filing with outside counsel and CFTC staff. Developed and tracked overall project plan including business development, market development, technical and business aspects. Conducted high-level business development presentations to prospective members (FCM’s, trading and clearing firms) and developed independent software vendor channels.
Managed the project team that coordinated the acceptance and introduction of an electronic trading system for a start up fixed income intra-dealer broker. Coordinated application development and enhancements to expedite market launch and reduce/ eliminate project risks. Project was launched in a record six months.
Conducted a business and technology “forensic review” of an electronic trading system for a U.S. regional equities exchange. Review consisted of both business and technology features, functions and operations of the trading system. The review was top down and bottom up “pathology” – from the Chairman, floor brokers and specialists to IT and operations. Produced a thorough trading system analysis report and presented to exchange committees and Board of Directors.
Conducted a project risk audit of business, operations and technology infrastructure for a new client-server trade management and clearing system for a major U.S. commodity futures exchange. Analyzed the business and technology issues associated with the cutover, relative to development, quality assurance, network/computer operations and user areas to ensure a risk-free implementation.
Conducted a Y2K due diligence review for a major U.S. derivatives/futures exchange. Audited all mission critical business and transaction processing hardware and software for Y2K compliance status. Tracked compliance progress and developed contingency plans.
Conducted an analysis of foreign exchange trading operations for a subsidiary of a major U.S. derivatives/futures exchange. Evaluated technology integration for trader productivity and conducted a build versus buy analysis of a new market maker/market taker application environment.
Conducted numerous market research analyses for major software solutions and technology vendors, including the direction of securities front office applications, trends and issues in the U.S. securities industry, the worldwide exchange automation marketplace etc.
Conference Speaker, “Trading Systems and Open Networks”, FIBV Markets and Technology Workshop, Geneva, 1996.
Guest Lecturer, “Electronic Markets and On Line Dealing Systems”, Financial Markets and Trading Program, Stuart School of Business, Illinois Institute of Technology, 1994 – 1996.
Author, “The Internet Trading Tsunami – Will It End?” Morgan Stanley Capital International Handbook of World Stock, Derivative and Commodity Exchanges, 1999.
Author, “Trends and Issues Facing Emerging Securities Markets”, The 1995-1996 International Chief Financial Officers and Fund Managers Yearbook.
Author, “Algorithmic Trading Trends and Drivers”, Financial Insights, September, 2004.