Under the agreement, the companies agreed that Advent will be allowed to phase out its point-to-point support, and phase in ACD this year and next.
The settlement includes the following provisions:
• Advent will extend full support for its Schwab Institutional point-to-point interface for licensed users through December 30, 2004.
• Advent and Schwab will both fully support and continue to offer Advent‚s ACD service to those mutual customers who choose it, concurrent with the point-to-point support. Schwab and Advent will both work together to enhance the Schwab ACD interface.
• Advent and Schwab will cooperate to create an orderly transition to ACD by the end of 2004.
Schwab also agreed to scrap plans to develop its own alternative point-to-point interface for Axys users. Advent, meanwhile, has promised not to discriminate between Schwab and other custodians in its ACD pricing.
"It was a very amicable process," Advent Executive Vice President Collin Cohen says of the settlement. "The real problem was the two companies did not really communicate as often as we should have."
AIMR Advocates Tougher Standards
The Association for Investment Management and Research (AIMR) has issued a draft of ethical business practices that it says promotes ethical research and analyst independence. By advocating even tougher ethics standards for equity research analysts than those already adopted by the Securities and Exchange Commission, AIMR is putting more pressure on an agency under fire for its coziness with the securities business.
The action is part of the backlash to the wave of scandals that have hit Wall Street since late last year–and to the concern that analyst recommendations have too often been influenced by the commercial investment banking interests of the firms. Among AIMR‚s proposed standards, for example, is that public companies and investment firms be prohibited from retaliating against analysts for unfavorable ratings.