Straight Through Processing
OTHER LINKS
The Asset Managers Forum (AMF) was formed in the beginning of 1998 to serve the interests of buyside operations professionals. The Forum operates as an independent trade group and is affiliated with SIFMA. Some 46-asset management firms are currently members of the AMF. Michael Wyne, Managing Director of Fischer Francis Trees & Watts serves as Chair of the Forum. Gary Koenig, Director of Dresdner RCM Global Investors, is Vice Chairman of the Forum.
Capco is the first services and technology solutions provider focused exclusively on forming the future of finance. Capco solutions are customized to improve clients' financial and operational performance, risk profile and return on IT investments by seamlessly integrating business strategy and process with technology implementation. Capco has developed a comprehensive STP Solution Suite providing the framework, tools, methodologies, and technology to successfully achieve STP. Capco has offices in the major financial centers around the world and focuses on capital markets, private client services, asset management, and banking clients.
The Canadian Capital Markets Association (CCMA) is a federally incorporated, not-for-profit organization, which has been launched to identify, analyze and recommend ways to meet the challenges and opportunities facing Canadian and international capital markets. The first priority facing the CCMA is to coordinate shortening the time it takes to settle a trade to one day from the current three days to coincide with similar efforts under way in the United States.
Canadian Securities Administrators (CSA)
The following links provide a CSA news release and report entitled "Regulators Report on Industry's Straight-Through Process Readiness."
- CSA news release - September 19, 2003
- Report on the OSC Web site
The Depository Trust & Clearing Corporation (DTCC)
See Also: DTCC's No More Paper Campaign - Why Go Paperless? FAQs on Physical Securities
The Depository Trust & Clearing Corporation (DTCC) is the largest financial services post-trade infrastructure organization in the world. Through its subsidiaries, DTCC offers clearance, settlement, custody and information services for equities, corporate and municipal debt, money market instruments, American depositary receipts, exchange-traded funds, unit investment trusts, mutual funds, insurance products and other securities. DTCC operating facilities are based in multiple locations in the U.S. and overseas.
DTCC's STP projects are broad in scope. The major technological initiatives include:
- Moving to real-time trade capture
- Rewriting the Continuous Net Settlement (CNS) system
- Combining the settlement systems of DTC and NSCC
- Introducing an Inventory Management System for settlement
- Real-time trade matching for fixed income securities
- Changes in Underwriting services for electronic storage of prospectuses and ocuments, as well as an electronic eligibility questionnaire
- Other STP capabilities in support of activities such as securities loan recalls and corporate action processing
Fixed Income Clearing Corporation (FICC)
FICC began operations on January 1, 2003, is DTCC's newest clearing corporation. FICC was formed by the merger of the Government Securities Clearing Corporation (GSCC) and the MBS Clearing Corporation (MBSCC) in order to bring greater synergies, cost reductions and efficiencies to the post-trade processing of fixed income instruments. FICC is divided into the Government Securities Division and the Mortgage-Backed Securities Division. These two divisions offer their own product-specific services to their own members, with each maintaining separate rules and a separate collateral margin pool.
- The Government Securities Division clears, settles and nets a broad range of U.S. Government securities transactions for its 104 member firms (brokers, dealers, banks and other financial institutions) and more than 400 correspondent firms that clear through these members. These transactions include original auction purchases of Treasury and Freddie Mac securities, buy/sell and repo transactions in Treasury and Government Agency securities, and GCF Repo transactions in certain mortgage-backed securities.
- The Mortgage-Backed Securities Division operates two primary business units: clearing services, which include trade comparison, confirmation, netting, and risk management, and Electronic Pool Notification (EPN) services, which allow customers to transmit/retrieve MBS pool information in real-time as opposed to standardized message formats. Mortgage-backed securities are bought and sold in the over-the-counter cash, forward and options markets. The key participants in these markets -- the nation's original secondary markets for loan assets -- are mortgage originators, government sponsored enterprises, registered broker/dealers, inter-dealer brokers, institutional investors, investment managers, mutual funds, commercial banks and insurance companies.
The Financial Information eXchange (FIX) protocol is a messaging standard developed specifically for the real-time electronic exchange of securities transactions. FIX is a public-domain specification owned and maintained by FIX Protocol, Ltd. The mission of this organization is to improve the global trading process by defining, managing, and promoting an open protocol for real-time, electronic communication between industry participants, while complementing industry standards. This organization has made developments within Fixed Income in order to address significant issues faced during the day-to-day trade life cycle "process" of Fixed Income Products, in a coordinated industry wide effort.
International Organization for Standardization (ISO)
The International Organization for Standardization (ISO) is a worldwide federation of national standards bodies from more than 140 countries, one from each country. ISO is a non-governmental organization established in 1947. The mission of ISO is to promote the development of standardization and related activities in the world with a view to facilitating the international exchange of goods and services, and to developing cooperation in the spheres of intellectual, scientific, technological and economic activity.
International Securities Association for Institutional Trade
Communication / International Operations Association (ISITC-IOA)
International Securities Association for Institutional Trade Communication- International Operations Association is a global working committee of securities operations professionals representing custodian banks, investment managers, brokers, and vendors. The group's mission is to foster alliances and advocate standards that promote straight through processing (STP) of securities transactions. The ISITC-IOA members actively participate in and influence industry-wide initiatives that promote direct electronic processing and information flow among all industry participants, throughout the entire trade cycle.
Jordan & Jordan is a professional services firm specializing in the financial information services industry. Jordan & Jordan assists securities, banking and information vendor senior management in evaluating business alternatives, developing innovative products and selecting suitable technology solutions. Through its participation in the Financial Information Forum and FISD, Jordan & Jordan is a participating member of the market data industry community.
National Securities Clearing Corporation (NSCC)
NSCC is the oldest and, in terms of the transaction volumes it processes, by far the largest of the clearing corporations. In 2001, it processed an average of nearly 14 million transactions each day. In the course of doing this, NSCC provides clearing and settlement, risk management, central counterparty services and a guarantee of completion for all trades involving equities, corporate and municipal debt, money market instruments, American depositary receipts, exchange-traded funds, unit investment trusts, mutual funds, insurance products and other securities. NSCC also nets trades and payments among its participants, reducing the volume and securities and payment that need to be exchanged by an average of 95% each day. NSCC generally clears and settles trades on a T+3 basis.
Omgeo is the result of a global joint venture that unites the strengths and resources of two industry leaders: the Depository Trust & Clearing Corporation (DTCC), the securities industry's respected utility and standards body; and Thomson Financial, a leading provider of financial workflow solutions. Omgeo board of managers includes recognized experts from around the globe who provide industry oversight and help shape the vision of Omgeo and the future of STP. They partner closely with solutions and service providers, infrastructure suppliers, industry standards organizations, and our clients to assemble the tools, technology, and processes essential to creating STP solutions.
Securities Market Practices Group (SMPG)
In July 1998, SWIFT sponsored the organization of the Securities Market Practice Group (SMPG). The formation of the SMPG resulted in the establishment of National Market Practice Groups (NMPG) in 34 geographic markets comprised of broker/dealers, investment managers, custodian banks, central securities depositories and regulators. The membership of the SMPG and the NMPGs are committed to the vision that standards in conjunction with defined market practices will bring the industry closer to its goal of achieving STP. The SMPG is a tactical initiative focused on enhancing the current securities industry infrastructure. However, this group also realizes the further benefit of industry utilities in dictating conformance to standards and market practice. As such, there is active dialogue between the SMPG and other industry initiatives (ie, FIX, ISITC-IOA, SIA-STP (US), etc.), in order to ensure that the tactical work of the SMPG provides a first step toward the restructuring of the securities industry. The SMPG is open to all participants interested in creating globally agreed market practices for the securities industry.
Software Industry & Information Association (SIAA)
SIAA is a trade association with a global reach that provides a unifying voice for all businesses that provide the software and information that underpin the digital economy. It has 1,200 member companies from around the world and provides a neutral business forum for the members to understand business models, technological advancements, industry trends and "best practices". SIAA has three missions. First, they seek to show the world that the software and digital information industry is the fastest growing industry sector and a major contributor to the global marketplace. Second, they protect the intellectual property of members, and advocate a legal and regulatory environment that benefits the entire industry. Finally, SIIA empowers their member companies with knowledge by serving as a resource to them on a wide range of traditional and emerging subjects that affect their businesses.
The Financial Information Services Division (FISD) of the Software and Information Industry Association (SIIA) provides a neutral business forum for exchanges, market data vendors, specialist data providers, brokerage firms and banks to address and resolve business and technical issues related to the distribution, management, administration and use of market data. Participants use the forum to exchange ideas, build business relationships and improve the business climate associated with the worldwide flow of financial information. FISD was founded in 1985 and is governed by a 27-member Executive Committee consisting of equal numbers of exchanges, vendors and market data user firms.
U.S. Securities and Exchange Commission - Facts on Holding Your Securities
This link explains the choices an individual investor has when it comes to holding their securities. These include: Physical Certificate, "Street Name" Registration, and "Direct" Registration. The website details the advantages and disadvantages of each by answering frequently asked questions.