Transcript Thought-Leadership Brainstorm

Omgeo’s Role in the US and
Global Settlement Landscapes
Marianne Brown, Omgeo
8 October, 2007
Agenda
• Who is Omgeo?
• An Institutional Trade
• Omgeo and the Institutional US Tradeflow
• Measuring Success
Who is Omgeo?
• Leading provider of post-trade, pre-settlement automated
services and products to Investment Managers (“IMs”), BrokerDealers (“BDs”) and Custodians
• Global joint venture between DTCC and The Thomson
Corporation’s post-trade, pre-settlement businesses.
• Established in May 2001
• Over 6,000 clients in 44 countries
• Process 1.5 million trades a day globally
• Manage settlement information on over 4.8M accounts
• 15 office locations globally
• 500+ Employees
Who is Omgeo?
Governance
• DTCC and Thomson Financial are 50/50 joint owners
• As the regulated entity, DTCC maintains control over any
•
matters related to US regulated aspects of Omgeo
Omgeo’s industry controlled Board of Managers:
• Has 7 of 11 voting Managers from industry (e.g., Merrill
Lynch, Morgan Stanley, Northern Trust Company)
• Plays vital role in ongoing governance and industry oversight
• Represents interests of clients in decisions about strategy
and operations
Who is Omgeo?
Governance
• Board Of Managers:
1.
Rick Macek, Chairman - DTCC representative
2.
Michael Bodson, DTCC representative
3.
Sharon Rowlands, TF representative
4.
Jim Toffey, TF representative
5.
Taylor Bodman, Brown Brothers Harriman
6.
John Devine, Merrill Lynch
7.
Marianne Doan, Northern Trust
8.
Robert Gartland, Morgan Stanley
9.
Robert Kaplan, State Street Corporation
10.
JP Marson, BNP Paribas
11.
Marcus Ruetimann, Schroeder Investment Trust
12.
Marianne Brown, Omgeo (CEO) - Non-voting member
Who is Omgeo?
Where We Fit in the Institutional Trade
Lifecycle
Pre-Trade
Order
Processing
Trading
Post-Execution
Operations
Settlement
Omgeo
Notice of
Execution
Trade
Allocation
Trade
Acceptance
Trade
Trade
Confirmation Affirmation
Bank
Notification
6
Buy Order
Buying
Broker
Notice of
Execution
Investment Manager sends trade
block (total) and allocation details
Omgeo
ALERT
Omgeo
OASYS
Investment
Manager
3
6
Matched or matched
affirmed confirmations
distributed to all parties
of a trade
Exchange or
OTC
Notice of
Execution
2
7
Broker/Dealer
OASYS sends trade
blocks and allocation
details to TradeMatch
Omgeo TradeMatch
and TradeSuite
Custodian
Broker/Dealer accepts
trade block and
allocation details
4
5
For DTC-eligible
securities, trade
information is sent from
Omgeo to DTC;
settlement of DTC-eligible
trades, including transfer
of cash and securities,
occurs at DTC.
Broker sends data to
TradeSuite to create
confirm
Post-Execution
1
Investment
Manager
TradeMatch compares
OASYS allocation to
TradeSuite
confirmations
Depository
(DTC)
Settlement
Purchasing
Investor
Buy Order
Pre-Trade
Omgeo and the Institutional US Trade
Flow
Measuring Success
• With the Omgeo TradeSuite/DTCC model:
Affirmed trades are 75 times less likely to be reclaimed than
unaffirmed trades
• 91% of trades are settled by noon on T+2
•
– This allows a full day to reconcile trades, detect any errors, failures,
etc.
– Other methods often don’t reach DTCC until T+3 – less time rectify
any errors/trade fails
– Failed trades cost institutions 250 USD per domestic trade and 535
USD per cross-border trade
Trades are sent to DTCC in real-time: better business continuity,
greater efficiency, lower costs
• Since Omgeo’s inception, volumes through TradeSuite have
doubled, but affirmation rates remain constant
•