The Brass Utility (Brut) electronic communications network (ECN) has selected to self-clear trades using the Phase3 System provided by SunGard Brokerage Systems. Brut, which is majority owned by Automated Securities Clearance, an operating unit of SunGard Data Systems, chose to process trades through the Phase3 system after looking at several other back-office products, and plans to go live with the system in January of 2000.
Brut will use the Phase3 system as a service bureau application, housed at SunGard Brokerage Systems' site near Boston, with terminals installed at Brut's New York site. "Not only are we both related to SunGard, but they also have a superior system and the pricing was in the range," says Brian Hyndman, president of Brut. "From a user standpoint, it's very user-friendly and it has all of the reports that we need, but probably more important is the price."
Hyndman estimates that the Phase3 system will save Brut "between four and five million dollars over the next year." Previously, Brut was processing trades through Merrill Lynch Professional Clearing, but as its volume has been growing and cost became a factor, Brut decided to look for other systems. Brut will begin testing the Phase3 system in the next couple of weeks, says Hyndman. Currently, Brut uses the Brass order execution system, which will be integrated with Phase3 to handle listed and over-the-counter transactions using one interface.
Besides offering equity clearing through its SunGard Brokerage Systems Unit, SunGard Data also provides software for the exchange-traded derivatives markets through its SunGard Futures Systems subsidiary. Included in SunGard's product offerings are Octagon - a trade management system for exchange-traded futures and options - and Octagon Global Margin Server - margin calculations product for trading houses, CTAs, CPOs and hedge fund operators. SunGard Futures also offers the GMI System for back-office clearing and accounting.