Omgeo, the leading provider of trade management solutions, and JASDEC, the Japanese central securities depository (CSD), today announced a link between their respective services that will streamline trade processing and drastically increase Japanese market efficiency.
The interface between Omgeo and JASDEC will provide the first, and so far only, single point of access to both domestic and cross-border trades.
Historically, for investment managers (IMs) that process trades manually in Japan, once a trade had been confirmed between broker and investment manager, the IM was required to send trade instructions to each trust bank in order to affirm with the broker. The trust bank would then send instructions to JASDEC to settle. The direct link between Omgeo and JASDEC eliminates these unnecessary and cumbersome steps, as trade instructions of matched, institutional trades will now automatically be sent to JASDEC and then passed through JASDEC to the trust bank, thus reducing the risk of failed trades and operational costs and improving market efficiency. The link has been successfully tested by a number of early adopter clients and is ready to process live trades. As we continue to see a rise in trade volumes as a direct result of increased front office automation, such as direct market access (DMA) and algorithmic trading, it becomes increasingly important to focus on overhauling outdated and often manual back office and settlement process.
"So far, JASDEC has continued to concentrate on the realization of reform in securities clearing and settlement, and as one of the important constituents, we launched our pre-settlement matching system in 2001 and it has widely contributed to promote STP in Japan's securities market. We expect that building a strong relationship with Omgeo will only support this further," said Yoshinobu Takeuchi, president and chief executive officer of JASDEC.
"Omgeo has been committed to the Japanese securities market for over ten years," added Adam Bryan, president and chief executive officer of Omgeo. "Through our link with JASDEC, we are pleased to provide true end-to-end automation of the trade lifecycle. While there is currently a high rate of automation in the front offices and at the end of the trade lifecycle for many Japanese investment managers, there was an opportunity for Omgeo to improve back office operations and eliminate manual steps in the process."
Omgeo's relationship with JASDEC is an integral part of the company's broader strategy to build relationships with central depositories around the world. By integrating its confirmation/affirmation and matching services with CSDs' instruction and pre-settlement matching systems, Omgeo is aiming to deliver greater end-to-end straight-through processing and provide efficiencies similar to the ones realized in the US through its link to DTCC. Investment managers, broker/dealers, custodians and CSDs will benefit from the elimination of redundant operational steps, the achievement of shorter trade settlement cycles and greater transparency of trade flows from confirmation through to settlement.
Omgeo is a joint venture of The Depository Trust and Clearing Corporation and Thomson Financial.