Building a Broker-Dealer: Vendors

As part of our series on what it takes to build an institutional equities broker-dealer from scratch, here we present a list of all the vendors and partners we engaged over the past two years in setting up our broker-dealer subsidiary. We would have loved to have a list like this to reference check as we were building, but at least we had two things going for us: 1) our first hand experience from helping build IEX and RBC’s electronic trading platform and 2) a great network of friends and former colleagues who provided ample advice and guidance along the way. You may note that we engage with relatively few technology vendors as we’ve built our trading platform from scratch in-house, but of course we leveraged a great deal of open source libraries and tools in doing so. Our CTO Prerak is currently preparing a deep dive into our entire technology stack, so between that blog post and this one, you should have everything you need to build a broker-dealer of your very own!

Trading and Clearing

• Apex Clearing is the clearing firm we selected after a lengthy evaluation process.
• Credit Suisse is our DMA Partner. In other words, we access the majority of trading venues (exchanges and dark pools) via their pipes.
• IEX is currently the only stock exchange we connect to directly, although we’ll likely connect directly to more exchanges and dark pools as we grow. We also use IEX Cloud for various purposes including symbology and reference data reconciliation.
• EMS/OMS Providers. These are the various software portals buy-side firms use to send orders to their brokers. We engage with them one-by-one each time we onboard a customer who utilizes an EMS we haven’t connected to yet.
• Likely Soon: as of this writing, we are not currently engaged with DTCC Omgeo (trade allocation and account opening software provider), nor any CSA platforms like Cowen Westminster, but firms like these are likely on the horizon as we bring on pilot customers who utilize their services.

Connectivity and Infrastructure

• Amazon Web Services: our entire trading platform is hosted in the AWS cloud. We did evaluate Google Cloud Platform and Microsoft Azure before landing on Amazon, and we do use GCP for hosting ancillary services like Find My Fills.
• TNS is the extranet provider we use to connect to trading venues, market data providers, FIX networks, and client EMS’s. We will likely connect to additional extranet providers as needed in the future.
• Refinitiv Autex is the primary FIX network we use to connect to clients when a direct connection via TNS is not possible. We will likely connect to additional FIX networks as needed in the future.
• Bloomberg provides many relevant services to our business (FIX network, EMS, terminal for operational support, etc.). Their chat platform is also still one of the primary communication means used by buy-side traders (our customers). It pains me to write this, but so far we mostly use Bloomberg for chat.

Data

• UTP/CTA (Nasdaq/NYSE) are the providers of SIP market data (real-time trades and quotes). We made the decision early on that it would not be helpful nor prudent for Proof to participate in the technology arms race, and we designed our algos to run off SIP data rather than direct exchange feeds, although this is a topic we regularly revisit.
• Exegy is our real-time market data normalization and aggregation vendor.
• OneTick is our historical market data provider and research environment.
• Polygon.io is an API-based market data provider, and we use it outside our critical trading path to power tools like Find My Fills.

Developer Tools

• JetBrains is the IDE used by most of our team, both for Java and Python development. We’re seriously considering using their Space product as well, though we haven’t taken the leap yet.
• Atlassian (JIRA, Confluence, Bitbucket): we use several Atlassian products for project management, issue tracking, build management, wiki, etc.

Regulatory, Compliance, and Legal

• Regulatory Ridge (Shannon Fitzgerald) is our regulatory consultant. We described how Shannon has helped us in our blog post on obtaining a broker-dealer license.
• Cooley is our law firm.
• Global Relay is our 17a-4 record retention solution for archiving communications (email, chat, social media, etc.).
• Wasabi is our 17a-4 storage solution for records other than communication. Prerak detailed our usage of Wasabi (and SIRS and Global Relay) here.
• SIRS is our 17a-4 Designated Third Party (D3P).
• Clerky is a software based legal document provider that was particularly useful for generating SAFE’s when we were fundraising after we did YC.
• Assurance Dimensions is our broker-dealer’s PCAOB auditor.
• Mercer provided our broker-dealer’s fidelity bond.

Finance and HR

• First Republic is our primary bank.
• Brex provides our credits cards, and we also use Brex Cash for additional banking services.
• Quickbooks is our accounting software.
• Carta is our cap table management solution and also where we go for 409a valuations.
• Cartana Consulting, and specifically Anya Cross, is our outsourced FINOP.
• 1Source Partners is our tax accounting firm.
• Gusto is our payroll and HR solution, and we manage employee insurance and benefits via their platform (e.g. Oscar, Guardian, Guideline 401(k), etc.).
• Omnipresent is the Professional Employment Organization (PEO) we use to employ Han in Canada.

Office and Business Operations

• Google Workspace is our main productivity suite (email, calendar, shared drive, groups, spreadsheets, etc.), although we also use Microsoft Office.
• Slack is the chat tool where we do the vast majority of our internal communication.
• Zoom for video chat.
• Notion is one of the collaboration tools we use as a wiki and for tracking meeting notes (in conjunction with the Atlassian suite). I for one love Notion, and it’s the first place I go for organizing thoughts, writing content, CRM, wiki, etc., but not everyone on the team is as gung-ho as me about it, and various folks gravitate toward other tools.
• Dialpad provides call forwarding services — i.e. we have individual office phone numbers as well as team lines that Dialpad forwards to our personal cells. We also use their UberConference product for conference calls.
• Virtual Post Mail is a nifty service that receives all of our physical mail and scans and emails it to us. It’s surprisingly useful, especially for keeping track of the mountain of duplicate trading statements I have to review in my capacity as CCO of our broker-dealer subsidiary.
• The Yard is our co-working/office space.