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Broader contingency planning, greater use of technology and the capital markets’ resilience topped the agenda at the 29th annual Securities Industry Association conference, which was held last week in Boca Raton, Fla. The event is considered the premier securities industry meeting and is held every year in South Florida. The event marks the first major gathering for the securities industry since the September terrorist attacks, which resulted in the deaths of 1,200 securities professionals at more than 700 SIA-member firms. Although attendance was dramatically lower, some vendors say they were pleasantly surprised by the traffic in the exhibit hall. Many of the technology companies trying to pitch their products at the conference were getting a shot in the arm from Harvey Pitt, chairman of the Securities and Exchange Commission. Pitt asked for improved backup plans on Wall Street, more decentralization of key services and greater use of technology. “People are beginning to understand that the more you can automate your procedures, the better integrity you have in your firm and in the industry,” said James Hayden, a product manager for Fairfax, Va.-based Mantas Inc., a business intelligence company. In addition to outlining the financial health of the securities industry, the SIA leadership used the meeting to pledge support for the U.S. government’s new efforts to combat money laundering. “We will not tolerate the use of our capital markets to help finance terrorist operations or any illegal activities,” said Allen Morgan, the newly elected chairman of SIA and the chairman and chief executive for Morgan Keegan & Co., a major Wall Street firm. The event opened Nov. 8 with Marc Lackritz, president of SIA, calling for a moment of silence for those lost in “this incomprehensible tragedy.” The ranks of vendors at the annual gathering in Boca Raton were noticeably fewer, but business was clearly on their minds. The event was especially important for technology vendors, whose companies assumed new importance after Sept. 11, as securities firms are replacing damaged systems, relocating or discussing the launch of backup offices in other parts of the country. “It’s a big conference for most of the major players in the industry,” said Michael Mangiafico, director of sales in market data services at Cicada, an Oklahoma City company that makes technology applications for stock exchanges. Mangiafico had no second thoughts about attending the high-profile gathering, which featured tight security. “This is one of the best meetings in the industry for reaching senior level managers in investment management firms and broker dealers,” said Tom Ricciardi, a director at New York-based Network Appliance Inc., which provides data management and delivery services to financial firms. Network Appliance, a conference sponsor, has been very active in assisting Wall Street clients that were impacted by the events of Sept. 11. A key theme on Wall Street is the decentralization of financial operations through the use of technology to sustain operations in the event of a disaster, Ricciardi said. “The Internet was just the beginning,” he said. He envisions a virtual workplace, noting that several New York firms such as Salomon Smith Barney and others have well-established back office operations in the Tampa-St. Petersburg, Fla., area. Here are some highlights of the conference: � Marc E. Lackritz, president of SIA. In past years, the annual SIA conference celebrated new highs in the securities markets, record levels of capital raising and other signs of growth. “But not this year,” Lackritz told the audience. “This year, we recognize, appreciate and celebrate our industry’s incredible resilience and resolve in the aftermath of the Sept. 11 attacks.” Lackritz noted that within minutes after the attack, brokerage firms, regulators and public officials began to work together toward rebuilding. He praised the efforts of Pitt, and noted that the support and leadership of the SEC “were essential to protecting investors and ensuring the integrity of our markets.” � Industry financial performance. In the face of difficulties, the industry is still showing a “respectable performance,” Lackritz said. The securities industry will raise a total of $3.2 trillion in debt and equity offerings for U.S. corporations, which beats last year’s figure and the previous record established in 1999. However, third-quarter debt and equity offerings both declined as compared with last year. On a down note, the market for initial public offerings “ground to a complete halt in September — the first month since December 1975 in which there were no IPOs,” Lackritz told the crowd. What’s more, the SIA estimates the 2001 full-year IPO volume will be $36 billion, less than half of the 2000 record levels. Industry revenues and profits are down, with domestic pre-tax profits likely to drop 47 percent from last year. Cuts in operating costs, including layoffs, contributed to the profit picture, and 2001 will still be the fifth-most-profitable year in the industry’s history. � Allen Morgan. The newly elected chairman of SIA said he’s most impressed with “the sense of community that is at the heart of our industry.” On Morgan’s watch, the SIA will press for “a new round of [global] financial services talks to open capital markets and gain better access for our customers.” The SIA will push for foreign countries to “enact and enforce securities laws within their borders,” Morgan said. The SIA will also cooperate with U.S. efforts to track money launderers, he said. � Harvey Pitt, chairman of the SEC. “Those of us who were spared must carry on,” Pitt said. “The terrorists win only if we stop living our lives and imprison ourselves in fear. I refuse to do that, and I know you do too.” Pitt noted that several key themes have emerged from Sept. 11. They include the need to expand continuity plans in the face of sudden events. In the past, Wall Street continuity plans focused only on less catastrophic losses such as temporary electrical disruptions or partial shutdowns of buildings. Future continuity plans need to be broader and rely less on “single points of failure,” Pitt said. Concentration of business, wherever possible, should be avoided and limited, Pitt said. Toward those ends, new emphasis should be placed on technology, and Pitt voiced the need to create a chief technology officer at the SEC.

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