After Lehman Brothers filed for bankruptcy in September 2008, Barclays Capital jumped at the opportunity to build out its electronic trading presence in the U.S., acquiring Lehman's North American assets and quickly getting to work integrating the firms' electronic trading capabilities. Frank Troise, Barclays' head of global equities electronic trading products and the former managing director and head of U.S. equities electronic trading products at Lehman, explains that the newly combined team evaluated both firms' electronic trading platforms in the fourth quarter of 2008 and now is moving to roll out the resulting products and services.

"We are up and running globally across all regions," Troise reports. "The legacy Lehman platform is running in the U.S., while Europe and Asia are running on the legacy Barclays Capital platforms."

According to Brian Fagen, cohead of liquid market sales, Americas, at Barclays Capital, the firm has been migrating legacy Barclays clients in the U.S. onto the Lehman platform. "In the U.S. the Lehman equities business was significantly more built-out and broader across products than Barclays Capital, which made the decision to go with the Lehman Brothers platform relatively simple," explains Fagen, who previously served as managing director and head of program trading and electronic trading sales at Lehman Brothers.

But, Fagen adds, "In the other regions it was not as clear. We lost the bulk of the [Lehman] technology platform in Europe and Asia due to the nature of the acquisition, and there was much more of an overlap of technology and systems on that side as well."

Troise notes that in the months prior to Lehman's bankruptcy and acquisition by Barclays, Lehman Brothers had been rolling out its next-generation electronic trading products and infrastructure, including a new algorithmic trading offering in the U.S. "We were working on plans to roll out the next-generation infrastructure in Europe and Asia as well," he says. "The approach we are taking now is right in line with those plans."

While Barclays did offer a basic set of algorithms before the acquisition, Fagen points out, the firm's real strength in electronic trading was outside of equities. "Barclays Capital has leading products in futures, fixed income and foreign exchange, which made it a great fit with the strength of the Lehman offering in equities and options," he says.

Barclays also already had a good low-latency DMA platform in Europe and Asia, which will be used by the combined organization for the time being, according to Fagen. Ultimately, though, the global organization will migrate to the Lehman platform for equities, he adds.

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