Press Releases

Release Date: March 27, 2008
Contact:
Robin Francis, (212) 313-1168, rfrancis@sifma.org

SIFMA’s Asset Management Group to Play Key Role in Meeting 2008 Goals Outlined by Operations Management Group for Derivatives Trades Processing

New York, NY, March 27, 2008 – The Securities Industry and Financial Markets Association’s (SIFMA’s) Asset Management Group (AMG) is part of a letter of agreement that was signed by the senior managers of 17 major derivatives dealers (Major Dealers).  The agreement serves as an update to the Federal Reserve Bank of New York and other regulators and outlines goals, strategies and major benchmarks toward the continued improvement and streamlining of operational efficiency within the credit and equities derivatives markets.

This agreement is a continuation of the work of the Operations Management Group (OMG) that is tasked with leading fundamental change in front-to-back processes across Over-the-Counter (OTC) derivatives.  The Federal Reserve Bank of New York has taken the lead in improving operations and efficiency in the derivatives market which is important to its overall scaling up and growth.   

“SIFMA and AMG are committed to advancing true operational scalability by working hand-in-hand with buy-side member firms to ensure that they successfully meet the necessary and evolving operational requirements,” said Joe Sack, SIFMA managing director.  Within OMG, Major Dealers work closely with the main trade organizations representing both buy-side and sell-side organizations, SIFMA’s Asset Management Group, the International Swaps and Derivatives Association (ISDA) and the Managed Funds Association (MFA).   

Some of the following key goals are outlined in the letter:

• Consistent use of electronic confirmation platforms for electronically eligible trades
• By May 2008, SIFMA, ISDA and MFA will deliver a market implementation plan on all relevant goals
• OMG’s goal is a marketplace where majority of trades are matched on their trade date.  In July, submission matching accuracy targets will be met by Major Dealers and buy-side institutions that are part of the OMG
• Sets a 2008 timeline for electronic novations which are also known as assignments and are essentially secondary market trades.  New novations clients will have 30 days in order to make trades electronically.

The letter to the Fed is significant as it marks the commitment of SIFMA, ISDA and MFA to educate, not only their members, but the wider marketplace about the 2008 goals and how they impact various market participants.  A major requirement on asset management firms is investment in technologies that will help the buy-side automate the allocations process, thereby helping the industry achieve the matching commitments described in the letter to the Fed.  “SIFMA will add value to the process by maintaining dialogue, flow of information and facilitating industry partnerships that will create technology solutions,” says SIFMA’s Joe Sack. 

Additionally, SIFMA is poised to guide market participants through the change process and ensure that custodians and vendors are included in ongoing discussions.  Specifically, SIFMA will work through its Asset Management Group consisting of senior executives and its Asset Managers Forum consisting of trade processing professionals, enabling it to help the buy side meet its commitments.

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The Securities Industry and Financial Markets Association brings together the shared interests of more than 650 securities firms, banks and asset managers. SIFMA's mission is to promote policies and practices that work to expand and perfect markets, foster the development of new products and services and create efficiencies for member firms, while preserving and enhancing the public's trust and confidence in the markets and the industry. SIFMA works to represent its members’ interests locally and globally. It has offices in New York, Washington D.C., and London and its associated firm, the Asia Securities Industry and Financial Markets Association, is based in Hong Kong.