Omgeo reported significant growth in fixed volume across its transaction services, including Omgeo Central Trade Manager (Omgeo CTM) and Omgeo OASYS. In 2011, Omgeos total fixed income transaction volumes exceeded the previous years by 21% globally, with 9.9 million fixed income transactions in 2011 compared to 8.2 million in 2010. An increasing number of participants are adopting automated solutions in this area in order to reduce risk.
Specifically, Omgeo CTM, experienced a 38% increase in fixed income volumes overall. Regionally, the Americas experienced the highest growth rate in Omgeo CTM fixed income volumes at 85% year-on-year, which was closely followed by Asia at 69%. Europe continued to lead the way in total volume, processing almost 1.5 million fixed income allocations on Omgeo CTM in 2011 alone.
During the past year, Omgeo further strengthened its fixed income capabilities in Omgeo CTM by adding support for specified mortgage-backed securities that were issued by Fannie Mae, Freddie Mac and Ginnie Mae.
In addition, Omgeo added To Be Announced (TBA) coverage to support basic processing, with additional functionality, including the electronic matching of trade delivery stipulations, to be rolled out by end of 2012. TBAs encompass a significant proportion of the U.S. fixed income market and are second only to treasuries in terms of average daily trading volume, noted Kevin Arthur, director of Fixed Income at Omgeo.
Omgeo OASYS, the companys U.S. domestic trade allocation and acceptance service, saw a 25% year-on-year increase in fixed income volumes, including notable growth in both money market securities and TBAs. Money market securities volumes grew by 62% while TBAs saw a 152% increase, demonstrating the increased demand for low-risk fixed income products in a volatile market. Other products experiencing strong growth in 2011 included convertible bonds (42% growth), mortgage-backed securities (30% growth) and federal agency securities (29% growth).
On the back of the increased use of Omgeo CTM and Omgeo OASYS for fixed income transactions, Omgeo ALERT, a web-based global database for settlement and account instructions, also experienced a significant increase in fixed income instructions. Today, over half of all ALERT settlement instructions are fixed income.
(JDC)