Omgeo & DTCC Ready ‘Global Utility’ for SSIs
Post-trade solutions provider Omgeo and the DTCC are combining forces to build a repository that would effectively serve as a global utility for standing settlement instructions, intended to lower operational costs and bolster efficiency, say Omgeo and DTCC officials.SSI data such as account number, currency code, security type, bank identifier codes (BICs) and place of settlement is needed to settle trades between counterparties.
Mark Bouchea,
executive director,
product management,
Omgeo
The repository and utility services, slated to be implemented during the first quarter of next year, will establish a golden copy to store, validate and communicate settlement instructions for all markets, says Mark Bouchea, executive director of product management at Omgeo. The Omgeo Alert web-based database for SSIs will serve as the core for the service, coordinating and distributing SSIs among trade counterparties. “We are effectively making Omgeo Alert the global SSI utility,” Bouchea says.
Most of the details of the partnership between the DTCC and Omgeo were worked out before DTCC announced on July 24 that it will buy out Thomson Reuters’ 50 percent stake in Omgeo, Bouchea says. The DTCC owns the other half.
Omgeo is pushing for this centralized role to significantly lower costs for market participants, particularly for broker/dealers that have to provide the maintenance and related services for those clients that do not use Alert, Bouchea says. Some brokers are incurring costs now to manage exceptions such as an allocation for an account they have not opened yet, he says.
“When they have clients that don’t use Alert, these brokers have to store these instructions locally, they have to re-validate them themselves, they have to manually provide them or enrich them to other transactions,” Bouchea says.
The SSI utility will offer compliance with local market standards, which is “something that is very difficult for the brokers to do when they’re storing this data locally,” Bouchea says. “We’re going to help drive that by enabling global custodians and prime brokers who are the ultimate owners of the SSI data to maintain this data via an automated link. We also want to build an exception process around that.”
In addition, the utility offering will be user governed, Bouchea says. “We’re establishing a new product governance committee staffed by senior representation from across the industry.” The kick-off meeting of the group will happen this quarter.
What does Bouchea say to those in the industry that may resist the new utility and are pushing back against the DTCC and Omgeo? “I would say that it was agreed to by the steering groups of global broker-dealers,” he says, adding that when the two providers vetted the idea with customers, the large clients wanted Alert at the core of the new solution. In addition, Omgeo faces pockets of “varying awareness” of what it does around the globe and will have to do a better job of clarifying what it offers, he says. For instance, in some markets such as those in Asia-Pacific and Europe there is no precedent for a central service provider.
For now, Alert is used by more 1,800 firms globally—approximately 875 investment managers and 925 broker-dealers, say Omgeo officials. The service holds more than 5 million settlement instructions on nearly 500,000 accounts.
DTCC Partners with Barclays, Credit Suisse, Goldmans and JPMC on Client Data Service
The DTCC will be working with Barclays, Credit Suisse, Goldman Sachs and JPMorgan Chase to co-develop a service to collect and manage client entity reference data for regulatory and business requirements, say officials from all parties to the recently signed memorandum of understanding (MOU).
The ultimate goal is “a comprehensive, centralized platform to effectively manage virtually all client reference data,” says Michael C. Bodson, DTCC president and CEO, in a statement. The service will exploit the DTCC’s data platforms, operational processes, reference data assets, the Avox data validation service, and the Omgeo Alert SSI database.
The service will address the client reference data needs of banks, broker dealers, asset managers and hedge funds by focusing on legal entity hierarchies, standing settlement instructions, compliance data for regulators (Dodd-Frank and EMIR), client on-boarding/know your customer, FATCA and other related operational and reference data requirements, officials say.
The development effort will use “significant design work already undertaken in partnership with a broad group of major sell-side and buy-side firms globally,” according to a DTCC statement.
Linedata Launches I-BOR Platform
Investment management solutions provider Linedata has launched an Investment Book of Records (IBOR) platform, dubbed Linedata I-BOR, which is already operational at several client sites, say officials.
Linedata I-BOR features start-of-day and intraday views of positions and cash, and aggregates data sources across an enterprise, officials say. The real-time platform enables historical and contemporary security position and valuation views as well as current and projected cash positions information.
Advent Software Takes to the Clouds
Advent Software, a software and services vendor for investment managers, announced at its recent user conference that it is developing Advent Direct, a cloud platform that will encompass front-to-back office operations, including customized solutions for investment management needs. One of the first solutions to be delivered via the cloud will be Advent Direct Community to help Advent clients, partners, and employees take advantage of social media technology.
Advent Direct is in beta testing now and Advent Direct Community is slated to go live later this year, say Advent officials. Other solutions will become available via Advent Direct during the first quarter of 2014.
IBM Teams with AcadiaSoft for Margin Call Messaging
AcadiaSoft now offers connectivity between its electronic messaging solution, MarginSphere, and IBM Algo Collateral for two-way collateral messaging integration, say officials from both companies.
Margin calls can now be transferred between the IBM Algo Collateral Open Connect adaptor and AcadiaSoft’s MarginSphere via the IBM Algo Collateral workflow support, say officials. The combination of technologies is intended to facilitate faster margin call processing times, less reliance on email for client communications, less of a need for dual-key entry, more user efficiency and cost cuts, an audit trail of all communications, and support for business growth across over-the-counter derivatives, cleared, repo and securities lending businesses.
Fiserv Releases FATCA Manager
Financial technology vendor Fiserv has released FATCA Manager, a monitoring and control solution to help financial services firms meet key specifications of the Foreign Account Tax Compliance Act (FATCA), which targets tax evasion by U.S. taxpayers.
Built on the Financial Crime Risk Management platform from Fiserv, the FATCA Manager offers detection, workflow and reporting capabilities to assist with ongoing compliance.
FATCA focuses on foreign financial accounts and offshore assets. This includes foreign financial institutions with financial accounts held by U.S. taxpayers or foreign entities in which U.S. taxpayers hold a substantial ownership interest. FATCA exists to combat money laundering, fraud and global tax evasion.
The development effort will use “significant design work already undertaken in partnership with a broad group of major sell-side and buy-side firms globally,” according to a DTCC statement.
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