â¢ Increased adoption further proves the link between same day affirmation and settlement efficiency as revealed in recent Omgeo study.
Omgeo, the global standard for post-trade efficiency, today announced that Omgeo Central Trade ManagerSM (Omgeo CTM), its strategic platform for the central matching of cross-border and non-U.S. domestic equity and fixed income transactions, has seen dramatic expansion in the global financial community with 40 percent year-over-year client growth as of Q1 2011. With an existing community of 6,000 Omgeo clients globally, over 600 investment managers and broker/dealers worldwide have adopted Omgeo CTM to process an average 5 million total allocations per month.
Following the economic crisis of 2008, the global financial community has been looking for ways to reduce operational risks and costs by embracing increased levels of trade lifecycle automation. With mounting pressure from global regulators around risk reduction and a potential move to an accelerated T+2 settlement cycle across Europe, community members have found Omgeo CTM and its central matching capabilities to be an effective way to accelerate the post-trade lifecycle and manage risk.
According to a recent study published by Omgeo, trades verified on the day of execution, also known as same day affirmation (SDA) and achievable with Omgeo CTM, have a much higher chance of settling on time and are less likely to fail than those trades that are matched manually or locally. By demonstrating a direct correlation between SDA rates and settlement efficiency, the study confirmed key factors that lead to greater operational efficiency and reduced risk in the financial marketplace, including the significance of central matching. Centrally matching trades with Omgeo CTM achieve an average SDA rate of 93 percent, versus locally matched trades with an average SDA rate of 72 percent.
Steve Matthews, COO of Omgeo, comments, âThe significant growth in clients using Omgeo CTM clearly demonstrates the value of a central matching solution, including an accelerated trade process and reduced risk. At Omgeo, we remain dedicated to ensuring that all of our products add value to the marketplace and we will continue to evolve Omgeo CTM to meet industry needs.â
John Desmond, Chief Operating Officer at Harris Associates L.P., states, âBy leading the market in affirmation best practices, Omgeo CTM has helped us lower operational risk and increase transparency in the trade lifecycle. With the recently demonstrated correlation between SDA rates and settlement efficiency, Omgeo CTM is more crucial to our trade process than ever.â
Genevy Dimitrion, Vice President of Global Product Management at State Street, adds, âState Street offers our clients the option to subscribe to central matching services via Omgeo CTM. Matching remains an essential and increasingly critical process by aiding to reduce risk and enable efficient transaction processing.â
Tremaine Atkinson, Chief Operating Officer at LSV Asset Management, says, âOmgeo CTM is integral to LSVâs back office function. With the central matching capabilities of Omgeo CTM, we are able to reduce operational risk by making trade communication fast and seamless, while achieving higher levels of same day affirmation (SDA). Our SDA rates are far higher than industry norms because of Omgeo CTM.â
Julia Ko, Head of APAC Cash Equities Middle Office and CRM at UBS, comments, âAs an Omgeo CTM user, we strongly value the benefits of central matching. Central matching allows us to quickly affirm the economics of trades with our clients and focus more readily on preparing for settlement. At the same time, by leveraging Omgeo CTM, we receive instant access to an already connected community.â
Omgeo CTM was developed in 2001 in response to aggressive US Securities Industry Association (now known as SIFMA) T+1 committee requirements that proposed moving from a T+3 to a T+1 settlement cycle. Over the past decade, Omgeo CTM has processed over 300 million transactions. During that time, the central matching service has evolved into a trade lifecycle management solution which offers various features including trade valuation, settlement notification, file mapping, trade enrichment, trade notification and benchmarking, as well as reporting from a trade blotter, archiving, filtering, sorting and searching. To promote increased levels of straight-through processing, Omgeo CTM also offers direct links to local market infrastructures and depositories, including the CDS (Canada), Jasdec (Japan), KSD (Korea) and EuroCCP.