Omgeo, the global standard for post-trade efficiency, announced today that they are partnering with the Depósito Central de Valores, S.A. (DCV) of Chile to enable seamless connectivity between Omgeo Central Trade Manager (Omgeo CTM) and the DCV, enabling brokers to access the central matching benefits of Omgeo CTM via their DCV system, SADE. SADE is the name of DCV's institutional delivery system.
Two Chilean brokers, CELFIN and LarrainVial, have agreed to adopt the service once it becomes available in late 2011.
Currently, the majority of Chilean post-trade, pre-settlement processes for international transactions are not fully automated. Brokers rely on spreadsheets and faxes to communicate trade details and compare confirmation messages. The direct link to Omgeo CTM allows DCV broker participants to further automate the trade lifecycle and introduce greater levels of STP, thereby lowering operational risk and costs.
A recent Omgeo discussion paper detailed a direct correlation between same day affirmation (SDA) and settlement efficiency. SDA is defined as verifying trades on the day of execution. Chile's local SDA rate (67.4%) is above average for the Americas region of 53.8%, but is below both Europe and Asia where averages are 81.4% and 94.4%, respectively. According to the paper, regional SDA differences can be attributed to local regulation, cultural, and market practices including behavior and automation levels. Markets that embrace higher levels of post-trade automation typically demonstrate higher SDA and settlement efficiency scores. It is anticipated that the partnership between Omgeo and the DCV, which brings increased levels of automation to the local market, should greatly improve the SDA rate and further position the DCV of Chile as a regional leader.
Fernando Yañez, CEO of DCV, said, "As Latin America increases its presence in the global market, this partnership with Omgeo, combined with our efforts to provide increased local market automation, will allow DCV market participants to effectively communicate with trade counterparts globally, while reducing risk and promoting scalability as market volumes fluctuate."
Andrei Kriukov, Head of International Operations of CELFIN, added, "The use of Omgeo CTM via DCV will help streamline the whole trade confirmation and reporting process with foreign investors, reducing human errors and thus enhancing our global presence. We look forward to taking advantage of all of the benefits of Omgeo CTM."
Ignacio Montané, Head of Institutional Operations of LarraínVial, commented, "Through automation with Omgeo CTM, we will be able to achieve a higher level of STP via the matching process, which helps to reduce settlement issues, lower operational costs and risks, as well as improve counterparty confidence."
Tim Keady, Managing Director of Sales & Relationship Management at Omgeo, said, "The connectivity to the DCV demonstrates our ongoing commitment to automation across the global community, improving post-trade, back-office processes. By eliminating cumbersome manual steps, DCV broker participants will be able to access Omgeo CTM via their trading systems to yield higher SDA rates in Chile while taking advantage of greater levels of risk management."
The partnership with the Chilean DCV is aligned with Omgeo's continued commitment to collaborate with infrastructure providers to bring increased levels of automation, settlement efficiency and reduced risk to local markets. In addition to the DCV, Omgeo also offers links from its services to the Depository Trust & Clearing Corporation (DTCC), Canadian Securities Depository (CSD), Korean Securities Depository (KSD) and the Japanese Securities Depository (JASDEC).