SmartStream launches Exchange Notification Service for reference data space

Rick Steves

The service overcomes missing exchange notifications issues with real-time intelligence so that financial firms are able to manage their reference data from the exchanges.

SmartStream Technologies has launched an Exchange Notification Service (ENS) as part of its SmartStream RDU solution suite and developed in partnership with clients.

Designed to track, consolidate and normalize reference data notifications published by each exchange, the ENS service addresses the mammoth task of managing all subscriptions from more than 100 exchanges where derivatives are traded.

In conjunction with several clients, SmartStream realized that missing exchange notifications – due to multiple exchanges and formats – in the reference data space can be very costly.

SmartStream claims its Reference Data Utility (RDU) is the only service provider to produce a consolidated list of normalized notifications. ENS will be added to the suite so that firms no longer need to incur the operational overheads of manually monitoring these notices.

The service published intraday notifications immediately as they help drive quality improvements across functional areas, such as trading, risk mitigation, validating vendor notifications for corporate actions, and feed changes.

Linda Coffman, Executive Vice President at SmartStream RDU, commented: “Each exchange publishes notifications at various time intervals throughout the day and does not follow a standard template, or delivery method to publish the notifications used across the industry. With this in mind and following conversations with our clients, we decided to build the ENS. The service overcomes these issues with real-time intelligence and encompasses all the information that a financial firm needs to manage its reference data from the exchanges”.

A few years back, FinanceFeeds covered SmartStream’s clash with its ex-CEO Phillipe Chambadal over misappropriation of SmartStream’s trade secrets and breach of his Confidentiality Agreement.

He then filed a counterclaim arguing that the company did not allow him to make use of a Long Term Incentive Plan. He lost the $25 million claim in 2018 in court.

Chambadal worked at SmartStream as Chief Executive Officer from January 2009 through April 2016. On or around May 2, 2014, he was awarded an option to acquire one million shares in D-CLEAR EUROPE Limited, SmartStream’s parent company, pursuant to the Long Term Incentive Plan of SmartStream.

On January 23, 2017, approximately three weeks after SmartStream notified Chambadal that his employment was terminated, he wrote a letter to SmartStream indicating that he intended to exercise his option under the Plan. He claims that he decided to exercise his option because he “anticipated that certain executives were preparing the sale of SmartStream to a strategic buyer for $500 million”.

Chambadal contends that he satisfied all conditions precedent in order to be paid the full value of his option under the plan – approximately $25 million. Despite him having fully performed under the Plan, “SmartStream breached the express terms of the Plan by failing to honor its agreement with Defendant and by lapsing his duly earned award.”

For the option to be exercised, an Exit event, such as a takeover, had to take place. Whereas Chambadal concedes that no Exit event has occurred, he contends that under a plain reading of the Plan, an Exit event is not a requisite condition that must be satisfied for a plan participant to exercise options, but that options may be exercised prior to an Exit. He claims that he satisfied the condition because he believed that SmartStream was in the process of preparing for a sale to a strategic buyer for $500 million and he exercised his option prior to that anticipated sale.

The Judge found that Chambadal’s “strained interpretation of the word “may” is an unreasonable attempt at creating ambiguity in the Plan language where none exists”. The Judge notes that no sale has occurred; therefore, under the terms of the Plan, Chambadal has not properly exercised his option.

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