EMX Co, the UK-based electronic fund trading and message exchange, has come up with an ingenious solution to the chief obstacle to greater efficiency in mutual fund processing: the fact that nobody wants to pay for improvements.
To counter this, EMX Co is offering to share revenue with intermediary firms which make the financial commitment of investing in a hub connection to the system.
EMX Co says that, of the three ways for intermediaries to connect to EMX (browser, file upload download and hub) the hub connection involves the most significant investment – but also offers the most benefits in handling orders and valuations and, later this year, reconciliations. “These benefits include substantial direct staff cost savings as well as a reduction in errors and the costs arising from these.” says EMX. “As a result, a number of major intermediaries are currently developing hub connections and others have plans to do so next year. A number of these are currently reviewing the prioritization of their various IT projects and EMX Co are keen to influence their thinking.”
Until December 2003, any intermediary connecting to EMX via a hub will receive 0.20p for every qualifying message sent. “By facilitating hub connection, EMX is helping its users to move one step closer to straight through processing and to conducting their business more effectively,” says EMX.
The contribution to intermediaries’ investment will be calculated on the lesser of:
-Total number of valid messages (orders and valuations)
Or
–
Five times the number of valid order messages
Intermediaries planning to implement a hub solution who want to take advantage of the offer can apply immediately to EMX.
Commenting on the new initiative, Phil Wise, chief executive, EMX said: “An increasing number of the more far-sighted intermediaries in our industry have recognised the need to invest to change the way we process our business. EMX felt that now was the time to support those with the courage of their convictions.”