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As Latin American Markets Heat Up, Omgeo Partners With DCV In Chile

Currently, the majority of Chilean post-trade, pre-settlement processes for international transactions are not fully automated.

As Latin American markets increase their global presence, Omgeo announced it is partnering with the Deposito Central de Valores, S.A. of Chile (DCV). The partnership will enable brokers to access the central matching benefits of Omgeo CTM via their DCV system, SADE. Two Chilean brokers, CELFIN and LarrainVial, have agreed to adopt the service once it becomes available in late 2011, according to a release. Currently, the majority of Chilean post-trade, pre-settlement processes for international transactions are not fully automated. Brokers rely on spreadsheets and faxes to communicate trade details and compare confirmation messages. The direct link to Omgeo CTM allows DCV broker participants to further automate the trade lifecycle and introduce greater levels of STP, thereby lowering operational risk and costs, Omgeo noted in a statement. A recent Omgeo discussion paper detailed a direct correlation between same day affirmation (SDA) and settlement efficiency. SDA is defined as verifying trades on the day of execution. Chile's local SDA rate (67.4%) is above average for the Americas region of 53.8%, but is below both Europe and Asia where averages are 81.4% and 94.4%, respectively. According to the paper, regional SDA differences can be attributed to local regulation, cultural, and market practices including behavior and automation levels.

Ignacio Montane, Head of Institutional Operations of LarrainVial, commented, "Through automation with Omgeo CTM, we will be able to achieve a higher level of STP via the matching process, which helps to reduce settlement issues, lower operational costs and risks, as well as improve counterparty confidence." In addition to the DCV, Omgeo also offers links from its services to the Depository Trust & Clearing Corporation (DTCC), Canadian Securities Depository (CSD), Korean Securities Depository (KSD) and the Japanese Securities Depository (JASDEC). Melanie Rodier has worked as a print and broadcast journalist for over 10 years, covering business and finance, general news, and film trade news. Prior to joining Wall Street & Technology in April 2007, Melanie lived in Paris, where she worked for the International Herald ... View Full Bio

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