Omgeo, the joint venture between Thomson Financial ESG and the DTCC, confirmed in late November that SWIFT had accepted it as a key part of the securities market infrastructure. On the face of it, this puts the Omgeo virtual matching utility on an equal footing with the rival gstp/axion4 consortium, of which SWIFT is a part. But conspiracy theorists are reading it as yet another step towards a merger between the two utilities which they see as pre-ordained. The signs are four-fold. First, the two key figures in the management at Thomson Financial ESG prior to the merger – Howard Edelstein and Kevin Milne – have both left Omgeo. Secondly, a former member of the board of Omgeo, Juergen Marziniak, has succeeded Steve Crosby as CEO of gstp/axion4. Thirdly, it has now emerged that the DTCC has the right to buy Thomson Financial out of Omgeo without Thomson Financial enjoying a countervailing call option over the DTCC stake in the joint venture. Fourthly, argue the conspiracy theorists, DTCC has been trying since 1997 to find a way of exporting the American way of clearing and settlement to western Europe – and its chosen way round local objections was to allow gstp/axion4 to parade as an industry-owned utility which it could take over later via Omgeo. The conspiracy is so intriguing that GC.com decided to try it on Adam Bryan, president and CEO of omgeo. This is what he said:
GC.com: How satisfied is Omgeo that admission to SWIFT puts them on a level playing field with GSTP/axion4 at La Hulpe, bearing in mind SWIFT is part of the GSTP/axion4 consortium?
Bryan: We are happy with our relationship with SWIFT, which has had a long-standing relationship with the DTCC, one of our parent companies. In fact, Omgeo is already working with SWIFT through the Omgeo TradeSuite link to the SWIFT FIN network. Porting this existing TradeSuite connection over Omgeo Central Trade Manager will enable Omgeo CTM to provide seamless STP inclusive of settlement instructions to the clients we share.
GC.com: Does the fact that Jurgen Marziniak has left the Omgeo board to become CEO of GSTP/axion4 make Omgeo feel more confident about the incline of the playing field or less confident?
Bryan: We regard Mr. Marziniak as a strong advocate for improving market infrastructures and he will add value to these efforts. We also take it as a compliment that GSTPA has chosen someone close to Omgeo as its new CEO at this critical juncture in its history. This confirms that Omgeo is on the right track, with the right vision and plan in place to help the industry achieve global STP. With 6,000 clients in 40 countries already utilizing our services, we are highly confident about our current market position.
GC.com: Are the departures of both Howard Edelstein and Kevin Milne part of clearing of the way for a merger with GSTP/axion4?
Bryan: No. Both Howard and Kevin have played a major role in growing Omgeo’s business globally. Howard and Kevin’s decision to move on were personal career decisions. Omgeo’s discussions with the GSTPA to date have focused on achieving interoperability of our respective matching solutions. These discussions are continuing.
GC.com: Is it the case that DTCC has a call option over the Thomson stake in Omgeo, but Thomson has no countervailing call option over the DTCC stake in Omgeo?
Bryan: The joint venture is equally owned by Thomson Financial and DTCC, but specific terms of the agreement are confidential.
GC.com: What do you say to the suggestion that Omgeo was always a Trojan Horse for the DTCC and its American owners to achieve the goals of the IDC White Paper of 1997 by other means?
Bryan: Omgeo is an equal joint venture between Thomson Financial and DTCC, both of whom have long seen their mission as serving their clients’ global needs. Neither DTCC nor Thomson Financial has made any secret of this; indeed, DTCC was a finalist during the GSTPA bidding process. Meanwhile, Thomson Financial had built a strong global ETC business prior to the merger. So talk of Trojan horses and so forth is inappropriate.