Connamara Quarterly – Q22019

Thoughts from our CEO

There has been talk lately about the rise of Decentralized Exchanges (DEX) and how they differ from traditional centralized exchanges that utilize a central limit order book (CLOB) to match buyers and sellers. In a nutshell, a decentralized exchange utilizes smart contracts and blockchain to facilitate order matching and trade settlement in a peer-to-peer transaction.

Being in the business of building CLOB-based exchanges, I have been thinking about whether decentralized exchanges will be the exchange topology of the future.

The stated major advantage of a DEX is that the participant on the DEX does not need to place their tradable assets with the “exchange.” This avoids the loss of the participant assets through a failure of the exchange, hacking, or other means.

In traditional capital markets, which use centralized exchanges, the problem of protecting participant assets has effectively been solved. It is solved through a separation of risk by segregating customer account funding (brokers) from the order matching (the exchange) from trade settlement (the clearing house). Each of those entities have a set of regulations and capital requirements that must be met. There is also a system of cross guarantees whereby entities responsible for holding participant assets are obligated to cover any participant losses in the event of a default or failure of an entity.

In my opinion, the way to solve the asset protection issue of centralized exchanges is to model the market after traditional capital markets by instituting a solid separation of interests between participant acquisition, order matching, and transaction settlement along with a solid regulatory structure to ensure compliance.

Given that the problem of participant asset protection has already been effectively solved, I can’t see DEXs replacing CLOBs anytime in the near future.

— Jim Downs

Industry Insights

Getting To Market Fast Is The Difference Between Success Or Failure

By: John Lothian News

John Lothian News — With Bcause recently filing for Chapter 11 bankruptcy reorganization, Jim Kharouf of JLN looks at how the success or failure of a new exchange is tied into its time-to-market.

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In The News

Articles to reflect upon

5 Questions To Ask a Prospective Exchange Technology Partner

BY: Markets Media

Markets Media – It’s no secret that exchanges have undergone a drastic transition in recent decades, moving from physical trading pits to electronic versions. While it is true that trading in most major asset classes — equities, fixed income, futures, foreign exchange — is now electronic, the number of products,…
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7 Chicago Tech Companies with Serious Work-life Balance Perks

BY:Builtin Chicago

From team lunches to covering of transit costs, we work hard to ensure Connamara is an enjoyable and welcoming place to work. Built In Chicago recently featured us alongside six other local companies promoting a healthy work-life balance…
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Options Insider Radio Interview: Launching Startup Exchanges with Connamara Systems

BY: Options Insider Podcast

What is the origin of the Connamara name? How does EP3 work? What are the major challenges facing the industry? Jim Downs answered those questions and more in this interview with Options Insider.

CHICAGO, IL, September 16, 2019 — Connamara Systems, a leading provider of exchange matching engine technology, today announced that it has been retained by MaterialsXchange, a startup aiming to create a digital marketplace for raw materials industries.…
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Social Spotlight

Check out some selected posts from our Twitter account, including some recent speaking engagements with CEO Jim Downs.

#ICYMI, we built a #tech solution for @MorganStanley Investment Management scalable enough to handle spikes in message volume and flexible enough to work within the rules of a highly regulated industry. See the video of our #successstory below: https://www.youtube.com/watch?v=MSk-cIr1W5w

#ICYMI: EP3’s added RFQ functionality was featured by @FOWgroup. See what our CEO & Founder, Jim Downs, had to say on the growing popularity of this matching system in the wake of #COVID19 and how Connamara can help you implement it. #EP3iskey https://www.globalinvestorgroup.com/Articles/3694891?from=daily&utm_campaign=Daily%20-%20(18-06-2020%2012:01:02)&utm_source=Daily&utm_medium=email+editorial&utm_term=Show%20more&utm_content=Editorial

We’ve added request-for-quote (RFQ) functionality to EP3, our exchange platform solution. Read our blog to see how we continue to provide the most customizable & flexible exchange platform: https://www.connamara.com/connamara-launches-rfq-functionality-for-ep3-platform/ #EP3iskey

Our #tech expertise was brought to bear for @MorganStanley Investment Management, as we built out & integrated their EMS. See how we navigated this highly regulated industry & utilized our FIX protocol expertise to deliver a solution in our #successstory. https://www.connamara.com/connamara-msim-case-study/

For more on EP3’s request for quote (RFQ) functionality, as well as our CEO & founder Jim Downs’s thoughts on the increase in RFQ demand, check out today’s coverage from Wendy Lisney at @FOWgroup.

Global Investor Group@FOWgroup

Covid boosts RFQ demand - Connamara CEO
https://bit.ly/37Kb8cL

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Inside look: JOHN VATIANOU, CHIEF CLIENT OFFICER

WHAT ARE YOUR PRIMARY RESPONSIBILITIES AT CONNAMARA?

I’m the Chief Client Officer at Connamara Systems. My responsibilities include managing a cross-functional team providing post-delivery services to clients, maintenance of open source projects, servicing support contracts and information security policies and procedures. All of this is to align the fulfillment of the Connamara mission and strive to create and maintain a consistent, repeatable, and scalable customer experience.

WHAT ARE YOU MOST EXCITED ABOUT WORKING ON RIGHT NOW?

I’m always excited to work with entrepreneurs to help them succeed. It’s what makes working at Connamara so rewarding. We get to see an idea go from pen and paper to actual implementation.

“The American Financial Exchange (AFX) is a start-up exchange. We have worked with John Vatianou and Connamara in the past and they were our first choice to developing our exchange trading platform. John and Connamara understand the unique needs, flexibility and rapid response required by entrepreneurial firms such as AFX that need to be innovative and nimble in order to respond rapidly to changing market needs. We view John and Connamara as AFX’s partners, not service providers, given their unique combination of financial market experience and knowledge, responsiveness, and highest quality design, engineering and quality.”

– Ed Berko, Managing Director at the American Financial Exchange