The Depository Trust & Clearing Corporation (DTCC), the premier post-trade market infrastructure for the global financial services industry, today announced that Omgeo Central Trade Manager (Omgeo CTM), its strategic platform for the central matching of cross-border transactions and which is a part of DTCC’s Institutional Trade Processing Product Suite, now enables Wholly Foreign-Owned Enterprises (WFOEs) in providing Private Fund Manager (PFM) services in China.
Last year, the Asset Management Association of China (AMAC) unveiled new rules allowing WFOEs to register as PFMs, thereby giving foreign institutional investors the opportunity to provide local PFM services through an established 100%-owned entity in China. The mandate creates opportunities for both foreign and domestic institutional investors that operate in the country, solidifying an important next step to providing new ways to access China - the world’s second largest stock market.
Omgeo CTM provides seamless connectivity from trade execution to settlement, including direct connectivity via FIX from front-to-middle office trade processing as well as via the SWIFT network to a full community of custodian banks for the purposes of settlement notification. And, when used in conjunction with Omgeo ALERT, the industry’s standing settlement instruction utility (SSI Utility), users can automatically enrich trades with SSIs, ensuring account information is accurate.
“DTCC is proud to have supported and provided solutions to the global community and industry participants in China for the last decade,” said George Jia, Country Manager for China, DTCC. “We will continue to partner with our global clients as new local reforms are implemented to assist foreign investors in their efforts to access the market. Omgeo CTM supports the WFOE policy by enabling global institutions to match A-shares with their Chinese counterparts.”
Following the launch of its first investment fund into international markets, Chinese investment manager, China Southern, pioneered the introduction of automated cross-border trading in China by adopting Omgeo CTM. “Omgeo CTM has helped us to achieve automation and reduce operational risks,” said Wenge Bao, Chief Compliance Officer, China Southern. “When investors ask us to take on more volume, we can confidently say ‘yes’ because we know Omgeo CTM can handle the workload efficiently.”
Speaking on the impact of the WFOE policy, Bao added, “Asset managers in China rely on Omgeo CTM’s post-trade processing capabilities to assist them when trading across borders and asset classes. As more international firms leverage the solution for cross-border trading into China in order to capitalize on new opportunities, like us, they will find Omgeo CTM to be an important partner.”