It is widely recognized throughout the industry that a major cause of trade failure is inconsistent and incorrect settlement data. The industry estimates that 30 percent of trade failures are a direct result of inaccurate settlement instructions. This number is largely fueled by firms using manual processes with minimal oversight/approval for the input and communication of settlement instructions. The new enhancements to Omgeo ALERT enable a community of users to mitigate the inconsistencies and data entry errors which occur in the settlement cycle.
Enhanced FX validations enforce tighter validations and standardizes entry of FX instructions. All FX SSI data entered into Omgeo ALERT is now subject to stringent standardized entry, which not only includes global standards established by the Securities Markets Practice Group (SMPG), but also goes a step further to include standards defined by members of Omgeoâs global investment manager and broker/dealer community within foreign exchange. Going forward, all FX data entered into Omgeo ALERT will align with standards established by SMPG or defined by Omgeoâs client community in the event a standard is not already established by SMPG.
âWith the enhancements made to Omgeo ALERT, we have begun to see significantly improved data, and have growing confidence that the settlement data we retrieve is accurate and consistent," said Dalbir Sahota, Data Service Group - Process Support and Analytics Manager at UBS. "Omgeo recognized a gap in the marketplace and addressed it by forming a global standard for foreign exchange instructions. Being able to leverage Omgeo ALERT for foreign exchange transactions is integral to operational stability. We are looking forward to the continuous improvement in data consistency as Omgeo ALERT expands its application of new functionality/validation in support of additional global markets.â
In addition to FX data enhancements, Omgeo now offers Omgeo ALERT SSI Lift Out, an outsourcing option where Omgeo retains responsibility for maintaining a clientâs account and settlement instructions in Omgeo ALERT. This frees up internal resources and headcount for investment managers by eliminating the need to maintain Omgeo ALERT instructions. Client data maintained by Omgeo is assured to be in compliance with the latest industry and market standards as set out in Omgeoâs quality data initiative. Omgeo ALERT SSI Lift Out ensures that counterparties have complete and accurate settlement instructions and account data. It also limits the time investment managers spend communicating with custodians each time there is a change to settlement instructions. All trading participants, custodians, investment managers and broker/dealers work from the same data, which Omgeo ensures is comprehensive and complies with the current local market standard.
âAt Omgeo, we take our role in settlements very seriously,â said Steve Matthews, managing director, product, Omgeo. âAs market rules and standards evolve, we are dedicated to keeping Omgeo ALERT in lock-step with those developments. We have a detailed roadmap that has been validated by our clients through the end of 2009 and our priorities are clearly defined. At the root of Omgeo ALERTâs enhancements today, and in the future, is an unyielding dedication to high quality data integrity.â