Markit, a financial information services company, and Omgeo, which provides post-trade pre-settlement trade management, announced that they have partnered to standardize and enhance the way buy- and sell-side firms manage documents required to open and maintain accounts.
The partnership links client settlement instructions used in trade allocations with client documentation used in account opening by joining the benefits of two leading industry services: Markit Document Exchange (MDE), a central online platform for counterparties to exchange documentation securely and efficiently, and Omgeo ALERTSM, a web-based global database for the maintenance and communication of standing settlement and account instructions (SSI). The asset management industry has long recognized the need to improve operational efficiency in the account opening process, the vendors said in a release.
Institutions like Goldman Sachs, JPMorgan, Royal Bank of Scotland and Deutsche Bank have voiced their full support to help the industry adopt this initiative that sets the new standard for centrally storing, organizing and communicating all critical entity and account documents, the release said. All trading relationships begin with an onboarding process that includes the exchange of documents required for compliance. By linking the documents on MDE to the accounts on Omgeo ALERT, the sell side can identify the counterparty, access its associated documents and efficiently open an account. This is particularly relevant when a trade is allocated to an account that is undocumented (or not fully opened) by the sell side.
Speeding the onboarding process lowers operational cost and reduces settlement times and the risk of failed trades, Markit and Omgeo said. "Globally, the financial services industry is prioritizing transparency and operational efficiency. The Markit and Omgeo partnership will allow the industry to more effectively meet new and changing regulatory requirements by streamlining the client onboarding process, a historically time-intensive and manual workflow," said Jon May, Global Head of Client Onboarding, Goldman Sachs. "We think that Markit's and Omgeo's efforts are very timely. This partnership helps improve transparency and helps the investment management community automate regulatory document distribution to brokers. It enables us to know, in real time, when a new account is fully on-boarded," said Cynthia L Meyn, Executive Vice President of PIMCO Operations.