Wall Street & Technology is part of the Informa Tech Division of Informa PLC

This site is operated by a business or businesses owned by Informa PLC and all copyright resides with them. Informa PLC's registered office is 5 Howick Place, London SW1P 1WG. Registered in England and Wales. Number 8860726.

Risk Management

07:16 AM
Connect Directly

Shaping STP

In "Game, Set, Match", Anthony Guerra most certainly captured the mood of the buy-side community when it comes to central matching.

In "Game, Set, Match" ( WS&T February 2003), Anthony Guerra most certainly captured the mood of the buy-side community when it comes to central matching. We are without question in a "Show Me" market in the technology sector, as in: "Show me the cost savings I will get TODAY from doing anything new or different." Return on investment has always been a key criterion that firms use to evaluate prospective technology investments, but never in recent years has the needed time frame for an ROI payoff been so short or the market been so skeptical.

In this environment, it is not surprising that broad-based buy-side acceptance of full central matching has been slow to take hold, as evidenced by the failure of GSTPA and the slower-than-expected uptake of our own non-U.S. domestic/cross-border service, Omgeo CTM. At the same time, the strong market interest in our U.S.-oriented buy-side central-matching service OASYS-Trade Match is also unsurprising, precisely because it requires only a modest upfront investment and yields cost savings almost from day one through substantially higher same day affirmation rates.

It is worthy of note that throughout the technology boom/bubble of the late 1990s and the current economic slowdown, Omgeo's message has remained remarkably consistent: STP will only be achieved through an evolutionary migration that protects technology investments and leverages infrastructure that is already in place. In other words, ROI is the key. Whether your firm is in a manual mode today, operating in an ETC environment, or ready to take the final step to central matching, there are scalable and customizable solutions available that will move you closer to STP and provide a genuine ROI over a realistic period of time.

The move to a complete industry-wide central matching model will eventually come, and at this point will not be dictated by grandiose industry initiatives or regulatory decree. Instead, it will be driven by the marketplace, based upon how compelling the business case is every step of the way. And this is how it should be. We are convinced that central matching is the most efficient way of achieving STP, but we are also realistic. Like STP itself, central matching will need to prove its case in the marketplace - one firm at a time.

Adam Bryan
President & CEO,

Register for Wall Street & Technology Newsletters
Inside Abel Noser's Trading Floor
Inside Abel Noser's Trading Floor
Advanced Trading takes you on an exclusive tour of Abel Noser's New York trading floor, where the agency broker known for transaction cost analysis, is customizing algorithms for the buy side, while growing its fixed income trading and transitions business.