Omgeo and SimCorp team up to automate repo processing

The first live repurchase agreement trade has been automatically processed in SimCorp Dimension and Omgeo Central Trade Manager (CTM) between Kammarkollegiet and Nordea Bank.

This marks a major milestone in the partnership between Depository Trust & Clearing Corporation (DTCC), the parent company of Omgeo, and SimCorp, which is hoping to deliver straight through processing (STP) to the marketplace.

The majority of repo transactions continue to be manual resulting in operational inefficiencies and error creep. The absence of a repo system for electronic confirmation, allocation and central matching can create an inherent risk in the post-trade environment.

Repo or financing transactions have recently caught the attention of regulators due to their large denominated trades and the associated risk to individual firms as well as the overall system. Confirming these transactions electronically is seen as a critical initial step in the clearance and settlement life-cycle.

DTCC’s Omgeo has been working with the International Capital Market Association’s (ICMA) European Repo and Collateral Council (ERCC), the industry representative body, to solve these challenges.

Omgeo CTM has been integrated with SimCorp’s enterprise investment management solution – SimCorp Dimension – to enable users to automate their repo post-trade matching processes. DTCC and SimCorp already provide support for equity and fixed income asset classes.

“With Omgeo CTM, we can match trade fundamentals with our trade counterparties, such as Kammarkollegiet, for the open and close legs of our repo agreements on trade date using a single trade ticket, ensuring terms of the deal are clear to both of us. Furthermore, Omgeo CTM keeps open repo trades available for re-matching, which allows us to make subsequent changes to our repo trades,” said Fredrik Waesterberg, Global Head of Settlement at Nordea Bank.