Buy-Side Firm Plans Omgeo CTM Launch in Q1

MFS Investment Management, a Boston-based buy-side firm with $115 billion under management, plans to send cross-border trades into Omgeo's Central-Trade Manager sometime in the first quarter.

The firm is using Heliograph, a London-based STP-platform provider, to connect its internal systems to CTM.

Gert Raeves, securities product manager at Heliograph, says his company will use its TradeFlow software to link MFS internal systems to CTM. The connection will require Heliograph to link two internal MFS order-management systems -- one vendor and one proprietary -- to CTM.

Omgeo currently has two clients on CTM for non-U.S. trades -- Royal London Asset Management and Deutsche Bank GFS. The company's plans to offer CTM for domestic U.S. trades are at least nine months out.

But some in the investment-management world seem to be reluctant to move off current post-trade products (Oasys/TradeMatch/NearMatch), which can offer a high degree of same or next-day affirmation, and onto the CTM when money is so tight.

Reaves says that getting buy-side firms to spend money right now is a challenge. "Buy-side firms have to be convinced of the value," he says. "They are putting pressure on vendors and network providers to justify any spend on a problem that many of them see as already solved."

He notes that Heliograph's TradeFlow can be used to hook firms up to a number of venues, such as Swift, the Depository Trust Company and proprietary custodian systems. It also offered connection to the Global Straight Through Processing Association's Transaction Flow Manager but that utility's recent bankruptcy almost assures the connection will never be used.

He comments, "The biggest problem with the GSTPA was timing. It was a mature effort with good business analysis, but it missed out on marketing and sales which makes it difficult in a bear market to convince people of the validity of the business."

TradeFlow's promise of connecting firms to multiple post-execution destinations is significant, says Raeves. "Buy-side firms are in a position where they need to be able to sit on the fence and not make one choice of where they want to go for confirmation and settlement," he says.

In gearing up to the MFS Q1 goal for CTM connectivity, Raeves says that Heliograph is currently working to determine what type of user views MFS wants to see in its "transaction-management solution."

He adds that for a typical buy-side implementation, which would see three or four internal systems being connected with multiple venues, the cost could be "a couple of hundred thousand," with implementation taking between three and nine months.