Sydney Futures Exchange Corporation (SFE) has entered an eight-year multi-million dollar agreement to outsource its core clearing technology and operational support functions to Swedish vendor OM.
The deal is valued at $28 million, including $5 million in capital costs (licence and project fees) and $23 million in annual facilities management and software support fees.
OM will also develop a new central securities depository system (CSD) and next generation fixed-income clearing system on behalf of SFE to replace the Exchange's existing Fintracs system. This will then be integrated with Secur, OM's clearing and settlement system. Once development is complete, OM will maintain operation and support for the new Exigo CSD system and Secur.
The new system will provide SFE with one common infrastructure for the clearing and settlement of all SFE-listed derivatives, and debt securities in Australia, says the company. The system will also enable SFE to extend its clearing capabilities to include equities and property settlement.
Robert Elstone, CEO and MD of SFE Corporation Limited, says: "The creation of a contemporary applications suite, based on global standards and an open architecture, significantly enhances our ability to offer new products and services. At the same time it broadens SFE's scope for trading and clearing alliances with counterparts in the Asia Pacific region."
Under the agreement, approximately 30 SFE staff are to be transferred to the newly-formed Australian OM development and facilities management team.