Omgeo has taken a further step towards its ambition of becoming a truly global matching service for trades entering central securities depositories (CSDs) for settlement by making Omgeo Central Trade Manager (Omgeo CTM) available to fund managers wanting to match trades in both Canadian domestic and cross-border securities through a single interface. The Canadian securities industry is planning aggressively to switch to settlement on T + 1.
In fact, by making Omgeo CTM available for domestic trades in Canada, Omgeo hopes to secure business from firms obliged comply with National Instrument 24-101 – Institutional Trade Matching (ITM) and Settlement, the statutory instrument mandated by the Canadian Securities Administrators that forces counterparties to agree to the details of a trade on the day the trade is executed. 240-101 is a key step towards settlement on T + 1.
“Through our direct link to the CDS, Omgeo CTM affords our Canadian clients the opportunity to achieve best-in-class institutional trade matching rates for both cross-border and now domestic trades,” says Marianne Brown, president and CEO of Omgeo. “We have clients in Canada who have leveraged our other solutions for cross-border trading for some time, and we have already seen healthy client interest in Omgeo CTM for the domestic Canadian market to greatly enhance their efficiency. Omgeo’s experience in this space, our large and expanding global community and organizational relationships with our parent companies, Thomson Financial – part of Canada-based Thomson Corporation, and Depository Trust & Clearing Corporation – the depository in the US, position us to help the Canadian market be at the forefront of efficiency.”
By providing same-day matching, Omgeo CTM will make a major contribution to the ambitions of the Canadian market to eventually settle trades on T + 1 – an ambition the US and other markets abandoned in the bear market of 2000-2003. Canadian domestic trades matched via Omgeo CTM are now sent directly to the Canadian CSD, the Canadian Depository for Securities (CDS), for settlement. The interface between Omgeo CTM and CDS provides fully automated messaging between the two systems to enable the electronic pass-through of matched trades on trade date. Omgeo says operational risks, costs and inefficiencies can be significantly reduced as a result. It says users can match upwards of 90 percent of trades automatically, allowing them to focus on exception processing and minimizing risk.
“National Instrument 24-101 necessitates that Canadian firms make their internal business processes and their interactions with counterparties much more efficient than they are today,” says Peter Delano, senior analyst from TowerGroup. “Investment managers, broker-dealers, and custodians are looking for technology solutions to support compliance with the institutional trade matching mandate while maintaining the firms’ ability to compete globally.”
Omgeo says Mackenzie Financial Corporation has successfully tested Omgeo CTM for cross-border trades in Canada and will soon begin testing for leveraging the solution for domestic trades. “We are looking forward to the ease of use of a single interface for both domestic and cross border trade processing that Omgeo CTM brings,” says Chuck Murray, assistant vice president, portfolio administration at Mackenzie Financial. “As we go through testing, we are excited that Omgeo CTM will help us achieve institutional trade matching as quickly and accurately as possible.”
“As an asset servicing provider, we are pleased to receive trade instructions from clients that have already been matched in the market,” adds David Linds, CIBC Mellon senior vice president, business development and client relationship management. “Leveraging automated solutions such as Omgeo’s CTM can bring many efficiencies to Canada’s post-trade, pre-settlement cycle.”
In addition to Omgeo CTM for cross-border and domestic trades, Omgeo currently has a community of Canadian clients using its ALERT database of SSIs, and the Omgeo OASYS Global matching engine that preceded Omgeo CTM.
Omgeo has deepened its presence in Canada by hiring Linda Penna as account manager for the region. Penna has over 20 years of securities industry experience, with nearly all of it spent in Canada. Most recently, she was with SS&C Technologies Canada Corporation as a client service manager for FMCNet.
Penna oversees Omgeo’s Canadian client accounts with specific focus on the broker/dealer community. She joins David Sexsmith in the region, who was recruited in 2006 to build relationships with some of the largest Canadian firms in the securities industry.