ETrade Financial helped pioneer the business of consumer stock and fund trading, once the province of brokers. But since online trading became commonplace, Americans have focused on U.S. securities, limited to accessing higher-return global companies indirectly through mutual funds and American depository receipts, which only half of the large, investment-grade foreign companies had bothered to set up. On an increasingly global corporate playing field, ETrade thought it could make trading stocks of foreign companies as easy as trading U.S. ones.
So in January 2007, the company asked CIO Greg Framke to make it happen. By August, ETrade customers could trade in six countries -- Canada, the U.K., France, Germany, Japan, and Hong Kong -- using U.S. currency.
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Launching its global trading platform so quickly was made partly possible by good circumstances. ETrade had previously bought a small exchange brokerage that had seats in six foreign stock markets. That was key because only seat holders have the right to trade stocks; without a seat, ETrade would have had to go through local brokerages at higher cost and less control, Framke says.
But having direct access to the exchanges merely laid the groundwork for getting into the business. Framke actually had to build the trading platform, integrating ETrade's settlement system with those of the six stock markets and handling the currency conversion from customers' U.S. dollars to the local currencies, as well as bringing in research from new sources. Plus, the platform had to be built with an eye on supporting the executive management's ultimate goal: facilitating trades across every one of the world's 42 bourses.
ETrade's U.S. trading platform had been developed under SOA principles. That meant that Framke's team could use many existing services, such as those tracking settlement status and customer accounts, while also more easily adding new services specific to the global markets, such as currency conversion. The U.S. platform hadn't been designed for global expansion -- "I would like to claim 100 percent foresight, of course," he says with a grin, but he does take credit for a good SOA implementation that kept the U.S. platform flexible and extensible for unknown future needs. "If you're right more often than not, you'll end up with a platform that's pretty flexible." Another result: "It wasn't that costly to extend the platform," he says.
Good circumstances also helped Framke get the foreign-exchange system built more easily: The main architect of the trading platform (dubbed T++) had previous experience in other international currency platforms, so he could more quickly design and implement one for ETrade. "That was a big help," Framke says.
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