OM and Sanford in Australian clearing pact

OM and Sanford in Australian clearing pact

Australia-based online financial services provider Sanford Limited has entered a partnership with Swedish trading technology group OM to set up a back office and third party clearing (TPC) service for the Australian broker industry.

The TPC offering will cover all major instrument classes including equities, fixed interest, futures and other derivatives and is to be based on Sanford's Plato II application for equities, and OM's Finess application for all other instruments, say the companies.

OM and Sanford have already commenced technical evaluation and due diligence to investigate the viability of the agreement. Subject to the outcome of these processes, OM and Sanford will pursue a range of other business opportunities including joint marketing and distribution agreements and in particular the marketing by OM of Sanford’s proprietary Plato II technology internationally.

Steven Goh, Sanford's CEO, states: "Plato II provides an end-to-end Web-based order, settlement, clearing and allocation transaction system established for the Australian market. The system is already up and running in Australia, providing equities settlement functionality to a number of brokers and 43,000 retail customers. OM's Finess product covers the remaining instrument classes."

Peter Ferguson, general manager for OM in Australia, comments: "One of the major problems faced by earlier attempts to establish TPC solutions in this market has been exchange connectivity. In this case, Plato II already has Chess accreditation and Finess already interfaces with OM's Secur clearing system, the system we operate locally on behalf of SFE Corporation (SFE)."

The OM/Sanford agreement also encompasses an option for OM to acquire a 15 per cent equity stake in Sanford through the issue of 7,785,000 shares at A$0.35. Upon exercise of the option OM will become Sanford’s second largest shareholder after the National Australia Bank.

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