Japan Embraces Central Trade Matching

Omgeo has reported a 47% year on year increase in equity and fixed income volumes processed on its post-trade services for the Japanese market.

Omgeo attributed the increase in volumes for the Japan market from June 1 2012 to May 31 2013 to buoyant conditions since the end of 2012 and growth in the local adoption of its strategic platform for central matching of cross-border and domestic equity, fixed income, exchange-traded derivative (futures and listed options) and contract for difference trades.

The comparison was for equity and fixed income volumes processed on Omgeo Central Trade Manager (CTM) and Omgeo OASYS Global for the Japan market from June 1 2012 to May 31 2013 versus June 1 2011 to May 31 2012.

Over 40 local investment managers and broker dealers use Omgeo CTM, with Japanese fixed income trades processed on Omgeo CTM more than doubling (fixed income volumes processed on Omgeo CTM and Omgeo OASYS Global for the Japan market increased 134% between the 12 months to May 2012 31 and 12 months May 31 2013) and marked growth in the volume of domestic trades processed by a number of significant clients in the last 12 months, including Sumitomo Mitsui Asset Management Company. Domestic trade volumes account for 74% of transactions processed on Omgeo CTM for the Japanese community overall, up from 56% a year ago.

Central trade matching was introduced to the Japanese market with the development of a link to connect Omgeo CTM to the settlement system of the Japan Securities Depository (JASDEC) in October 2006. Earlier this year, Omgeo also officially became member of Future Industry Association Japan Chapter (FIA-J) and bolstered its presence in the country with the appointment of Michael Ross as representative director.

Nellie Dagdag, Executive Director for Asia Pacific at Omgeo, said: “Our Japanese clients are increasingly interested in the benefits of automation and standardization for the processing of domestic and cross-border transactions, particularly as market volumes rise. According to our research, Japan has an extremely high level of settlement efficiency and a same-day affirmation (SDA) rate of over 95 per cent, so in many ways our Japanese clients are already global leaders in operational best practice.”

Omgeo is also targeting Japan’s Trust Bank sector to introduce efficiencies though the introduction of Omgeo ALERT, theweb-based global database for the maintenance and communication of account and standing settlement instructions (SSIs).

Dagdag continued: “Our clients are actively expanding their use of automated processes across asset classes and borders. We look forward to bringing increased levels of efficiency and reduced risk to the Japanese market.”