Pinch, punch, the first of the month, and SunGard makes another acquisition.

It's funny how significant things happen just when you least expect them. This time last year, as the industry wound down for the summer, a few hazy reports came out of mid-America about some dodgy mortgages. Few would have predicted in those early August days that the 'sub-prime crisis' would evolve into a global economic downturn.

But back to the rabbit SunGard has metaphorically pulled out of the hat this morning. The mega-vendor certainly has a habit of extending its business through acquisition. GL Trade is no small fish and will add considerably to SunGard's wares. Not only does GL do around 70 percent of its business in Europe (where SG is more US-centric), but it has a particular strength in connectivity to exchanges as well as listed derivatives which will surely prove a boon to SunGard as its seeks to expand its financial business in Europe and deal with market structure changes. It's too early for on-the-record comments from either side and the financial details of the deal are complex. But SunGard has 64 percent of GL's equity under its belt and, barring unforeseen problems, the full acquisition should be complete by 2009. Time will tell exactly what SunGard will do with its latest trophy.

In other news this morning, the London Stock Exchange has made further revisions to its trading tariff as it seeks to stay on top of competition from Chi-X et al. Most intriguingly, the LSE has said that it will "reward liquidity providers for competing more aggressively to offer tighter spreads and greater depth of liquidity." In other words, the exchange appears to be replicating the maker/taker model which incentivizes liquidity provision - a strategy deployed by the majority of MTFs that has already proven successful in attracting new liquidity. Effective from 1st September 2008, the new tariff will remove the 7.5 pence execution charge from both sides and the 1 pence order management charge.

Says exchange CEO Clara Furse in today's statement: “We believe the new shape of this tariff structure will capture the important growth arising from the major shift towards statistical arbitrage and algorithmic trading in UK equity markets." In the September issue of Waters, CIO David Lester will share more thoughts on the LSE and its positioning in the changing European landscape.

As Waters' publisher Incisive Media settles into its new downtown Manhattan office and gets to know its several hundred new colleagues formerly of legal publishing house ALM, one can't help reflect on the challenges of mergers and the sterling work that must have gone on behind the scenes to prepare for the successful integration of two 1,000-person corporate entities.

Merging two companies is a daunting task. From a technical and operations perspective, each company has different systems and processes for doing essentially the same tasks—such as content management, accounting, payroll and human resources. It can be a lengthy and arduous process to streamline these systems, to work out which ones to keep and which to retire, and then to transfer all the data from one system to another.

IT might be managed in an entirely different way from one firm to the other. A smaller firm might keep it informal and have a friendly face on hand at all times to assist with any IT problems. A larger company might have a sophisticated issue-logging system whereby users have to input an incident into an online helpdesk—although I’ve always wondered how people are supposed to do this if their problem is with the Internet connection itself.

Cultural integration is probably even more challenging—as one firm assumes another firm’s brand there is always a sense of lost identity and there will always be people who gripe about change. But change can be good. Mergers offer the opportunity to get a new perspective on the established way of doing things, and for each firm to benefit from the things the other does well.

Mergers and acquisitions have been a permanent feature on Wall Street for many years. But as top-tier banks lick their wounds and work out how to stay afloat after the last damaging year, many are choosing to let some of their acquired businesses go. Today’s Wall Street Journal reports that Lehman Brothers is considering selling off its asset management arm Neuberger Berman Management to private equity bidders, and last week UBS announced plans to separate its wealth management arm from the investment bank. After years of working to integrate, firms are now trying to decouple businesses, bringing about a whole new set of challenges.

Has your company recently undergone these kinds of changes? Waters wants to hear about your experiences.

(This article first appeared as the editor's letter for Waters News, our weekly email news alert. To subscribe to Waters News, please see the Free News Alert sign up tab on the right hand side of our homepage.)

Attention all European readers: I'm coming to London for an exciting reader event on September 9th that will take place at Merchant Taylors' Hall. Please join us for a great discussion about managing risk and latency in this turbulent market featuring a great speaker line up. Following this discussion we will be hosting a a great party for you, the readers! There will be a scotch tasting, open bar, great food and a live band. Please click here to register and pass along to your colleagues. I'm looking forward to meeting all of you for a terrific night of great scotch and great discussion.