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ICI ADP Picks Financial Messaging Technology for Fixed-Income Transaction Processing; E*Trade Outsources Trade Processing and Regulatory Document Delivery; A Lack of Industrywide Incentives Blocks Post-Trade Automation Efficiency, Tabb Group Says.

ICI ADP will build its future complex financial messaging products using Volante's data-management product suite, the division of Automatic Data Processing announced this week. ICI/ADP, an online securities transaction processing system, delivers fixed-income trading capabilities to the securities industry. Volante was selected from a field of five contenders. Volante's product suite will be initially used to automate wire transfer to ICI/ADP's impact systems via SWIFT messages to enhance the open items and P&I processing capability already delivered in impact. The impact system provides global financial institutions with trade capture and processing as well as settlement and clearing functions for domestic and foreign fixed-income instruments, including support for mortgage-backed securities.

E*Trade Financial Corp. is outsourcing its brokerage transaction processing and regulatory document delivery services to ADP Brokerage Services Group for its registered broker/dealer subsidiaries. As part of the 10-year agreement, brokerage back-office books and records systems have been converted to ADP Brokerage Processing Services (BPS). It replaces proprietary and vendor systems. ADP's Tarot system is already in use at the E*Trade U.K. office for international transaction processing. It will also provide regulatory document-delivery services and new account processing of paper applications. E*Trade is also using ADP's PostEdge platform for distributing broker/dealer confirmations and statements either electronically or by standard mail. E*Trade also outsources its proxy business to ADP. E*Trade expects the ADP platform to save costs and pave the way for centralizing the firm's securities processing and regulatory document-delivery with a single vendor.

A lack of industry-wide incentives for automation is slowing the march toward greater efficiency in the global securities industry, concludes a report released by the Tabb Group and sponsored by Omgeo, which sells post-trade, pre-settlement systems. Firms are focusing on enhancing internal technologies, leaving external gaps as the greatest hurdle to overcome, says the report, "Efficient Markets: Measuring and Monitoring Efficiency in Today's Global Financial Markets." The report draws on interviews with more than 50 top global investment managers, broker/dealers and custodians. All segments of the industry agree that the greatest challenge to industry-wide efficiency lies in the areas of reference data and connectivity. Owing to the lack of incentives to join industry-wide initiatives, investment managers saw managing their external STP and connectivity as the greatest challenge. Copies of the report are available at www.tabbgroup.com and www.omgeo.com.

Sterling Commerce announced support for the SWIFTNet 5.0 store-and-forward service, and added an offering, Connect:Direct for SWIFTNet 3.0, at Sibos2004 this week. Using the new product, SWIFT members can automate and manage their file exchanges among back-office applications and other SWIFT member institutions over Sterling's FileAct service without requiring a constant online presence to receive the files. Sterling Commerce says members will have the option to orchestrate file exchanges over FileAct in both a real-time and store-and-forward mode, and that a broad variety of files can be exchanged through the technology, including bulk payments, securities value-added reporting, commercial trade information, credit-related information and intra-institution information. Sterling Commerce is a subsidiary of SBC Communications Inc.

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