GSTPA Funding Discussions Underway

The GSTPA has asked some of its members to pony up more cash but whether they will remains to be seen.

Due to lower-than-expected traffic volume, the Global Straight Through Processing Association is in discussions with its members to get an additional round of funding, which may or may not be forthcoming.

At Wall Street & Technology's Straight-Through-Processing Conference, held on Nov. 20 in New York City, Stephen Kane, vice president of International Institutional Client Services with Merrill Lynch, spoke as a long-time member of the GSTPA.

"The initial investors have been in this for the long haul but, right now, it is quite a difficult time because T+1 is off the table. That was the driving force behind STP with our clients and so, from a broker/dealer perspective, it has become more difficult and we are questioning how much further we can go," said Kane.

When asked if Merrill had been approached by the GSTPA with a request for further funding, Kane said, "I know there are discussions, what those discussions are I don't know. I've assisted my team and supplied them with information to go into those discussions but, other than that, I have no direct feed on the exact status."

The GSTPA, an industry utility formed to streamline post-trade, pre-settlement information matching, went live with its Transaction Flow Manager on Sept. 9 and currently has one investment manager using its system.

Signing up investment managers is seen as the key to success for such a utility.

Knut Zyweitz, a member of the GSTP AG management team and the utility's chief technology officer, said that he could not provide any specifics on the organization's financial condition.

"Essentially, that is still an ongoing process and I think the details of that are better left to the chief executive officer," says Zyweitz. Calls to GSTP CEO Jurgen Marziniak seeking comment were not returned by press time.

Zyweitz adds, "At this moment I am not privy to all the details which Jurgen is working out with our stakeholders. In the next few weeks we will have to straighten that out."

Marziniak first announced at Sibos (Oct. 30 to Sept. 6) that the GSTPA might have to secure additional funding until it could sign on more investment managers.

"We don't have enough investment managers at the moment," said Zyewitz.

Omgeo, the chief competitor to the GSTPA, has two investment managers live on its Central Trade Manager platform, but the success of its existing services (Oasys and Oasys Global, for example), which are ubiquitous in the financial-services industry, means it has more time to build its client list.