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AT 9000:

An ivory tower solution from left field or, an engineering solution from engineers?
Andrew Kumiega Zach Ziliak Ben Van Vliet

Deming: Drive out fear and create trust

Fear encourages short-term thinking. The manifestations of fear are many: o Fear of reprisal o Fear of failure o Fear of the unknown o Fear of relinquishing control o Fear of change o And more.

The start of a Quality Revolution for finance?

ISO 9000 solves all problems?

ISO in the airline industry removes all problems? ISO in the food industry removes all problems? ISO in the car industry removes all problems? Is ISO the solution to the finance problem?

ISO in the Aerospace Industry

ISO in the Aerospace Industry

ISO in the Aerospace Industry

Food perfectly healthy due to ISO?

Automobile Industry: Zero defects due to ISO?

HFT Quality Problems?

First Reality Check

Every industry has quality problems. High quality firms have quality problems. Low quality firms have more quality problems HFT appears to have quality that exceeds other industries. HFT has high quality firms and low quality firms News organizations like to always tell sensational stories about quality errors.

ISO Concepts

Say what you do

Have documented quality processes;

Do what you say

Follow the documented quality processes;

Record what you do

Keep record trail of for the parts you manufacture or the code you create;

Prove it

Audit the process to insure it is being followed; Act on the differences.

Improve it

Misconceptions about AT 9000

It will require a 1000 page manual.

Only if you like writing and do not use a standard software quality management system Nothing solves all quality problems. A good quality system reduces problems not replaces problems.

It will not solve the quality problems.

Software firms do not use ISO.

Misconceptions about AT 9000

Software firms do not use ISO. ISO/IEC 90003:2004 provides guidelines for the application of ISO 9001:2000 to computer software. Finance Industry does not use ISO. ISO 22222-2005 Personal Financial planning Requirements for personal planners ISO 6166:2001 Securities and related financial instruments -International securities identification numbering system (ISIN)

Second Reality Check

Almost all high level software firms in finance use a software management system such as Jira, Attask, Bugzilla and follow a process. The IT industry uses quality management systems to program, test and release their code. HFT firms are all software based and utilize standard software practices.

Regulation vs. ISO

Congress writes laws. Regulators enforce laws. Regulators cannot help the industry improve quality since that is not in their mandate?

The EPA does not endorse ISO 14000

For further questions, please contact Jim Horne at the U.S. EPA at (202)-564- 0571 or Faith Leavitt at the Global Environment and Technology Foundation at (703) 750-6401.

Why adopt ISO?

ISO is an international standard that will be recognized by media. ISO is a cornerstone of every other industries quality management process. The quality revolution is here to stay in HFT. ISO is a way to signify that a firm is serious about quality. The SEC and CFTC should join the Federal Reserve Bank and help the industry improve quality.

ISO is the cornerstone of most successful firms

FedExs worldwide ISO 9001 certification gives us a competitive advantage in the global market-place, especially as more countries adopt ISO standards.
Frederick W. Smith FedEx Chairman and CEO

The Result of Quality Management Systems

The Result of Quality Management Systems

Why AT 9000?

Take your pick

AT 9000 is

Best practices

A proven solution A punch list A better default

Evidence of diligence A uniform language

AT 9000 is

A marketing advantage The best defense

Your chance for a say

What next?

Implement it!

What next?

Implement it!

Oops, not yet.

What next?

Implement it! Track it.

Oops, not yet. AT 9000 group on LinkedIn D14 Working Group

Build it.

Tell a friend.

ISO Brand Recognition

Aerospace (AS 9000) Chemicals (for example The Dow Chemical Company Quality Management System Manual) Medical devices (ISO 13485) Health care (see The National Committee for Quality Assurance (NCQA)) Food safety (ISO 22000). Environmental (ISO 14000).

AT 9000: A QMSS for AT

What is AT 9000?

AT 9000 is a voluntary standard. AT 9000 is industry-defined. AT 9000 is methodology-agnostic. It defines the what

Principles based not prescriptive Allows for firms to differentiate and adapt to the requirements as they see fit

It does not define the how

AT 9000 enables global harmonization of requirements By adhering to AT 9000, firms can credibly address their organizational responsibility of safety to the financial markets.

AT 9000: A QMSS for AT

What are the goals of AT 9000?

To recommend how all participants involved in automated trading should build their systems through process-driven research and development (R&D) and operation and control (O&C) By adhering to AT 9000, firms can credibly satisfy their organizational responsibilities to protect the integrity of the financial markets AT 9000 applies to the activities of trading firms, execution venues, ISVs, broker/dealers and clearing members

Why AT 9000?
Global Markets

Market Perception
All participants have an impact on market perceptions Venues Brokerdealers Trading firms ISVs Regulators

Advantage of an industry led initiative

Quality is a full organizational commitment not a regulation

Multiple regulatory regimes

One basic framework globally

Aerospace industry led quality it works

ISO 14000 as an example

AT 9000: A QMSS for AT

Examples of AT 9000 requirements:

The firm has installed and verified safety controls (e.g. real-time monitoring controls and kill switches); Verified acceptable algorithmic behavior under a variety of market stress conditions; and, Employ proper software and system version release management.

AT 9000 Timeline
Date 7/2012
9/2012 10/2012 11/2012 12/2012 1/2013 1/2013 2/2013 4/2013 12/2013

Milestone Informal Working Group draft

New work item was approved by X9 Informal working group draft X9 forms formal working group need industry participants X9 completes review and revisions X9 Ballot for approval Education Process starts Propose ISO TC68 New work item ANSI Quality Management System for Automated Trading Issued ISO Quality Management System for Automated Trading Issued

AT 9000 Working Group

The team is comprised of members from exchanges, trading firms, technology providers and regulators. These members meet weekly to write the AT 9000 and specifications. The dedication of these members is shown by the aggressive timeline of 2012-13 for ISO acceptance. Your firm can get involved in the development of the AT 9000 family of standards by joining

AT 9000 Document Structure

The next decade in automated finance

False perception of lack of quality in the automated trading industry. Everyone focuses on regulation, not education as to how to increase in quality in the industry.

Malcolm Baldridge Award Whats high vs. low quality in our industry.

With AT 9000 we will all have a framework for discussing how to automated trading a highquality industry without giving away proprietary information.


AT 9000