Etheios response to the recent acquisition of EMXCo

12 December 2006

Euroclear has acquired EMXCo in a deal thought to be worth around £24m. EMXCo develop and manage EMX, the UK’s main platform for electronic trading in mutual funds.

Mark Seaman, Principal Consultant at Etheios says "This has been talked about ever since Euroclear took over CREST! Euroclear should concentrate on converting the EMX systems, written in FIX, to the SWIFT 20022 format. This will be the best way to enable long term success and ensure compatibility with other STP systems, including Euroclear's own system, FundSettle. This is excellent news for fund managers and should lead to a considerable decrease in costs through SWIFT messaging compared with the old EMX messages. The broad range of SWIFT messages should also reduce costs for other back office functions such as commission processing and settlement.”

Alec Hoffman, Head of the Retail Fund Services practice at Etheios adds, "Although EMX has had some success in automating fund transactions, development of the system to further increase the scope of straight through processing (STP) in the UK funds distribution sector has been slow. Currently, EMX allows intermediaries to place orders with transfer agents as well as providing a platform for electronic valuations and reconciliations but has never provided a facility for automated settlement between counterparties. However, Euroclear also own CREST, the UK securities order and settlement system and therefore with this acquisition we should at last see integrated fund order processing and settlement in the UK mutual fund industry.”

Become a bobsguide member to access the following

1. Unrestricted access to bobsguide
2. Send a proposal request
3. Insights delivered daily to your inbox
4. Career development