Flash Boys and Document Doctors

Along with plenty of fund folks and a few “civilians” partial to a good story, I am currently reading Flash Boys: Cracking the Money Code, the latest narrative exposé from Michael Lewis that zeroes in on the complex world of high-frequency trading (HFT) in the US stock markets.

The fallout from Flash Boys, which argues that tech nerds have rigged the US stock markets, is still unfolding with Goldman Sachs apparently mulling the closure of its dark pool. Dark pools, closed-off areas that offer anonymity to stock traders, emerge particularly badly from the book due to the potential for a firm to use one to play the market against its own clients.

The debate on HFT will run and run. The FT is moved to wonder about the case for the defense of HFT and both sides of the argument are receiving plenty of media attention. The likely outcome for the industry is very difficult to predict.

Two lessons that are much simpler to draw from Lewis’s story are:

    1. Technology is evolving faster than most people can keep up.
    2. You can get in serious trouble for moving documents around carelessly.


Without spoiling the fun, one of the key players in Flash Boys lands an eight-year jail sentence for simply moving some documents, which he never even opened, to the wrong online repository.

Of course, that’s an extreme case, but everyday I come across people that need help keeping their fund documents secure. They are looking for somewhere to store information that ensures that only the right people can access it.

Like HFT, digital documents are evolving pretty fast and that speed leaves many confused. In Flash Boys, Brad Katsuyama, the RBC guy who tries to clean up the markets for ordinary investors, faces two huge challenges. The first is to learn about the impact of electronic tradings and its link to front-running, the second is to expose it. Many of the people, even the supposed tech experts, know alarmingly little about the technology they use and often his questions lead to glazed over eyes and confused looks.

As one of Kurtosys’ resident document doctors I encounter my own fair share of glazed eyes. Not because I’m trying to uncover market complexity, but because most of the fund folks I talk to assume that digital document libraries are highly complicated.
The asset management industry is packed with documents that need to be stored, published and distributed. All need to be in accordance with compliance rules and in a way that leaves an easily accessible audit trail. Document libraries have the ability to do all that, but suffer from a reputation for complexity that’s not always deserved.
At Kurtosys, we can ingest and load documents (or document URLs) along with associated meta data and distribute these to your own branded document library site. Our document portals can restrict documents to specific distribution markets and client types as well as show them against different levels of the fund hierarchy. We do all of this with remarkable simplicity.

Here’s how we do it

Send us the actual documents or document URLs and we’ll store them in our unified data model along with a spreadsheet or feed of the meta data explained below. A unique set of meta data should be created for each document as it drives the circumstances under which a document is shown on the page.

  • Client name – your company name
  • Audience – the client type the document should be shown for e.g. Retail or Institutional
  • Umbrella – the fund structure or more simply any grouping category above fund name e.g. SICAV
  • Fund name – you can probably guess this one!
  • Share class – the class of the fund
  • Level – documents can be shown at umbrella, fund or share class level and this field drives that
  • Unique identifier – usually ISIN but other unique share class identifiers are fine too. The document is relevant to this particular identifier
  • Language – the language of the document
  • URL – this is the document URL and only needed if you’re storing the document, if we store it we’ll produce the URL
  • Display name – the display name of the document as shown in the portal e.g. KIID or Factsheet
  • Country – the country where the document is distributed
  • Registered countries – the countries where the share class is registered
  • Country of domicile – the country where the fund is domiciled
  • Publication date – the date the document ‘goes live’, this allows documents to be loaded prior to them being shown in the portal

Flash Boys and Document Doctors 1 Flash Boys and Document Doctors 2

Once you’ve set this up, you have a document library able to store your information in an accessible – but secure – way that’s ready to be shared with whoever needs to see your documents.

Most importantly, you can be sure that unwanted viewers don’t catch sight of your information, and that, in a time when document misdemeanors carry hefty jail terms, should help you sleep easier at night!

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