Omgeo has seen a 47 per cent year-on-year increase in equity and fixed income volumes processed on its post-trade services for the Japanese market.
The increase reflects not only buoyant conditions in the local market since the end of 2012, but also growth in local adoption of Omgeo Central Trade Manager (Omgeo CTM). Omgeo CTM is the firm’s strategic platform for the central matching of cross-border and domestic equity, fixed income, exchange-traded derivative (futures and listed options) and contract for difference trades.
Omgeo now has over 40 of the country’s leading investment managers and broker/dealers using Omgeo CTM, with Japanese fixed income trades processed on Omgeo CTM more than doubling and marked growth in the volume of domestic trades processed by a number of significant clients in the last 12 months, including Sumitomo Mitsui Asset Management Company. Domestic trade volumes account for 74 per cent of transactions processed on Omgeo CTM for the Japanese community overall, up from 56 per cent a year ago.
Omgeo’s growth in Japan follows a number of key investments including the development of a link to connect Omgeo CTM to the settlement system of the Japan Securities Depository (JASDEC) and continued investment in Omgeo CTM. Earlier this year, Omgeo also officially became a member of Future Industry Association Japan Chapter (FIA-J) and has brought in new talent, including Michael Ross as representative director of Omgeo Japan. Ross was born and raised in Japan, and brings to Omgeo over ten years’ experience in working within the Japanese financial services industry, including the banking, insurance and securities sectors.
Nellie Dagdag, executive director for Asia Pacific at says: “Our Japanese clients are increasingly interested in the benefits of automation and standardization for the processing of domestic and cross-border transactions, particularly as market volumes rise. According to our research, Japan has an extremely high level of settlement efficiency and a same-day affirmation (SDA) rate of over 95 per cent, so in many ways our Japanese clients are already global leaders in operational best practice.”
In addition to automating and standardising the trade matching process, Omgeo sees opportunities among Japan’s trust bank sector to help improve overall market efficiency, including wider adoption of Omgeo ALERT, the industry’s largest and most compliant web-based global database for the maintenance and communication of account and standing settlement instructions (SSIs). With ALERT, Japanese firms can reduce the costs and risks associated with manual processes or maintaining proprietary SSI database systems in-house.
Dagdag adds: “Our clients are actively expanding their use of automated processes across asset classes and borders. We look forward to bringing increased levels of efficiency and reduced risk to the Japanese market.”