|Industry Increases Automation in Taiwan, Reduces Operational Risk
As market grows and attracts additional foreign investment, local market participants place greater emphasis on automating trade processes to reduce failed trades and increase competitiveness
Taipei/Boston/New York/London/Hong Kong – 22 May, 2012 – Omgeo, the global standard for post-trade efficiency, today announced that it is working with investment managers across Taiwan to significantly improve trade processing efficiency among the local Taiwanese broker/dealer community. BlackRock, one of the world’s leading providers of investment, advisory and risk management solutions, is playing a key role in automating the Taiwanese market with Omgeo.
Today in Taiwan, the need to minimize the inefficiencies and risks of trade failure associated with manual post-trade processing – such as phone, emails and fax - has been a key driver for change among the local Taiwanese financial markets community. An emerging market, Taiwan operates on a T+2 settlement cycle. Research demonstrates that Taiwanese users that have automated their post-trade processes have achieved higher levels of same day affirmation of trades (average of 97 per cent). Same day affirmation, or SDA, is the agreement of all trade details on trade date (T+0) and has been linked to improved settlement efficiency in markets around the world. With the general push towards increased foreign investment in Taiwan and cross-border trading rising across Asia, an efficient post-trade processing environment will continue to be an important differentiator for Taiwan’s regional and global competitiveness as firms focus on the timely confirmation and reconciliation of trades. In addition, it will help firms to minimize the risks and penalties associated with failed trades.
Centrally matching trades with Omgeo Central Trade ManagerSM (Omgeo CTM) helps users to achieve an SDA rate that is higher than those rates achieved with local matching. BlackRock’s adoption of Omgeo CTM has helped to drive the automation of trade confirmation processes with their Taiwan-based broker/dealer counterparties across equities and fixed income transactions, to the benefit of both counterparties.
Since BlackRock adopted Omgeo CTM in Taiwan in April 2011, the firm has made great traction with several broker/dealers, successfully transitioning from manual to automated processing. This demonstrates a clear indication that the local broker/dealer community is focused on addressing the inefficiencies in post-trade processing practices by embracing automation.
"Automating trade processing across all asset classes with our counterparties continues to be a key focus area at BlackRock”, said Jeffrey Plein, Managing Director at BlackRock. “Investment managers and broker/dealers are better equipped to mitigate operational risk, reduce costs and grow their business when they are not limited by manual processes. Omgeo CTM plays a vital role in enabling Taiwanese firms to achieve this.”
“It is great to see the Taiwanese market further explore automation”, said Julie Feaunati, Director of Relationship Management, Asia Pacific at Omgeo. “Our global community of investment managers and broker/dealers has demonstrated that automating trades across asset classes is vital to creating an efficient front-to-back trade process. The move from manual trade processing to automation will not only improve the overall efficiency of the local Taiwanese market by minimizing the risk of trade failures, but also reduce the overall operational and post-trade risk which is a key focus for local and international investors.”
Today, over 950 clients are using Omgeo CTM globally, representing 38% growth in the community year over year.
BlackRock is a leader in investment management, risk management and advisory services for institutional and retail clients worldwide. At March 31, 2012, BlackRock’s AUM was $3.684 trillion. BlackRock offers products that span the risk spectrum to meet clients’ needs, including active, enhanced and index strategies across markets and asset classes. Products are offered in a variety of structures including separate accounts, mutual funds, iShares® (exchange-traded funds), and other pooled investment vehicles. BlackRock also offers risk management, advisory and enterprise investment system services to a broad base of institutional investors through BlackRock Solutions®. Headquartered in New York City, as of March 31, 2012, the firm has approximately 9,900 employees in 27 countries and a major presence in key global markets, including North and South America, Europe, Asia, Australia, and the Middle East and Africa. For additional information, please visit the Company's website at www.blackrock.com.
At Omgeo, we are the operations experts, automating trade lifecycle events between investment managers, broker/dealers and custodian banks. We enable 6,500 clients and 80 technology partners in 52 countries around the world to seamlessly connect and interoperate. By automating and streamlining post-trade operations, we enable clients to accelerate the clearing and settlement of trades, and better manage and reduce their counterparty and credit risk. Our strength lies with our global community and our ability to adapt our solutions to enable clients to realize clear returns on their investment strategies, while responding to changing market and regulatory conditions. Across borders, asset classes, and trade lifecycles, Omgeo is the global standard for operational efficiency across the investment industry. Formed in 2001, Omgeo is jointly owned by the DTCC and Thomson Reuters.
 Omgeo Discussion Paper: Mitigating Operational Risk and Increasing Settlement Efficiency through Same Day Affirmation (SDA), October 2010
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