Omgeo, the world's leading provider of post-trade, pre-settlement trade management services, today announced significant progress in penetrating the post-trade fixed income market.
This success is marked by the milestone of processing one million fixed income allocations with a total trade value of $10.5 trillion through Omgeo OASYS, the U.S. domestic industry-standard trade allocation and acceptance service, in the first three quarters of the year. The company is currently on pace to process 50 percent more allocations than last year, demonstrating major advancement towards its goal to increase the fixed income community's commitment to automation.
"Since Omgeo's expansion into fixed income in the U.S. began three years ago with the introduction of fixed income capabilities on Omgeo OASYS, volumes have shown remarkable year-on-year growth," said John Burchenal, managing director, asset class expansion, Omgeo. "This year, we have processed over one million fixed income allocations through Omgeo OASYS in the first three quarters alone, compared to roughly 800,000 for all of last year and just over 400,000 for all of 2003. The achievement of our millionth allocation at this point in the year signals significantly-heightened awareness among the fixed income community of the cost savings and risk reduction brought about by post-trade automation."
When trades are allocated and centrally matched via Omgeo solutions, 80 percent of total confirms are affirmed on trade date, significantly reducing the chance of a failed trade. Non-automated trade allocations currently achieve a rate of only 18 percent of total confirms affirmed on trade date. Same-day affirmation helps the investment community realize increased cost savings by reducing the number of failed trades.
"The road to automating 100 percent of fixed income books is a long one, but Omgeo's momentum continues to build as more clients understand that automation brings efficiencies, scale, cost savings and a reduction in operational risk," said Kevin Arthur, director of fixed income markets at Omgeo. "So far in 2005, 30 percent more brokers and 20 percent more investment managers have signed up to automate their fixed income trade processing through our solutions than last year. We continue to leverage client feedback in order to provide solutions to their most pertinent pain-points."
Omgeo will continue to enhance its capabilities beyond the fixed income instruments supported by its solutions today. Currently slated for release in early 2006, Omgeo OASYS 5.0 will provide expanded fixed income instrument coverage, including the To Be Announced (TBA) contracts associated with mortgage-backed securities. In addition, this new version of Omgeo OASYS will increase levels of automation through enhanced fixed income and central matching functionality in Omgeo OASYS-TradeMatch.