SmartStream Technologies has released research into European Post Trade Processing, with the aim of identifying the most common obstacles to STP in the derivatives, equities, foreign exchange, cash and fixed income markets.
“While problems differ by country it’s clear that all geographies still have much work to do with respect to the automation of both equities and derivatives transactions,” says David Easthope, a Celent analyst. “In the equity markets rising volumes and increasing complexity of cross-border trades are leading to allocation and matching problems. Whilst for derivatives, and most significantly equity OTC derivatives, confirmation and matching remain the biggest issue.”
The report, based on interviews with European senior executives and an 80 person survey, states the fixed income and equity markets are concerned with accurate and efficient processing of corporate actions and firms are unhappy with the current clearing and settlement systems.
“The lack of commitment and attention to STP initiatives that address many of these issues is immediately apparent when you compare the comparatively low budgets allocated to improving Back and Middle Office processes,” adds Easthope. “This underinvestment presents Back and Middle Office managers with major challenges as their firms seek to address structural changes in the post-trade environment around clearance and settlement in the European Union over the next several years.”
“This survey highlights the complex issues that we help clients tackle day in, day out with SmartStream’s STP Control Architecture and our suite of Transaction Lifecycle Management applications,” says Christian Schiebl, European regional director of SmartStream Technologies. “Our ability to help clients manage the increasing emphasis on operational risk, compliance and their drive to reduce the cost of cross-border activity is unparalleled. SmartStream’s latest development, TLM Control, delivers a ground breaking approach to the automation of STP processes across the Middle and Back Office, enabling firms to rapidly construct powerful, scalable STP applications and attain sustainable RoI.”