Mainframes still rule on Wall Street

Computerworld - Big iron isn't dead yet -- at least not on Wall Street.

Indeed, mainframe computers will continue to perform key processing functions such as clearing and settling trades for major stock exchanges and back-end trade processing organizations in the securities industry for at least another decade, according to a new report released by Newton, Mass.-based Meridien Research Inc.

For mission-critical functions such as trade processing, there's still no substitute for the speed and capacity that mainframes can deliver, said Dana Stiffler, an analyst at Meridien Research and author of the report.

In fact, because of growing stock market volumes, many firms continue to add to their mainframe's MIPS.

For instance, The Depository Trust & Clearing Corp., which provides the primary infrastructure for the clearing and settlement of the majority of the equity, corporate debt and bond transactions in the U.S., added a few machines last year and is planning to do so again this year, according to Steve Letzler, a spokesman for the New York-based company.

At the start of last year, the Depository Trust had enough computing power in its IBM G6 mainframes to handle as many as 25 million transactions per day. By the end of last year, the company had added enough processors to handle 40 million transactions per day.

"By the end of 2001, we'll have that up to 60 million transactions a day" to handle growing volumes, Letzler said. "With full redundancy -- so we have duplicate sets."

Although the highest volume the Depository Trust has recorded in a single day was 19 million transactions, the company performs a critical function -- clearing and settling the lion's share of stock transactions for U.S. brokerages and other securities firms. "We have to be prepared to handle whatever the markets give us," Letzler said.

In addition to higher volumes, the market is also demanding faster execution.

Originally, the processing was performed in batches at the end of each trading day. During the past year, the Depository Trust moved to a multibatch processing format and expects to have a real-time process in place by year's end, Letzler said. This transition is part of the securities industry's move from a three-day to a one-day settlement cycle, due to be completed in 2004.

The same demands are also being faced by the stock exchanges.

"We're always adding more mainframes for purposes of enhancing capacity," said Steve Randich, chief technology officer at The Nasdaq Stock Market Inc. in Trumbull, Conn. Nasdaq uses Unisys Corp. mainframes for its quotation system, which puts