Beijing-based CITIC Securities has selected GoldenSource to provide a core enterprise data management (EDM) platform to support its move into international securities trading. The first phase of data management will use the GoldenSource Securities & Products solution as the security reference data platform.
CITIC Securities’ expansion into international markets is based on a Qualified Domestic Institutional Investor (QDII) licence obtained from the Chinese government and allowing the firm to invest up to 50% of net assets in foreign securities. QDII status has been available for a couple of years and CITIC is GoldenSource’s third QDII customer in China following contracts with China Asset Management and Bosera Asset Management.
According to Neill Vanlint, managing director of EMEA and Asia-Pacific at GoldenSource, “We started talking to CITIC Securities about a year ago. It had a QDII licence and wanted to invest in foreign securities on behalf of its clients and use them in proprietary trading, but it had little experience of international markets. It is pretty much a greenfield site and has adopted a best-of-breed approach to building a platform for international trading.”
While international trading is the first role for the GoldenSource 360 EDM platform, CITIC Securities intends to migrate all its domestic operations to the platform, as well as its brokerage and investment banking activities. “Ultimately, CITIC Securities wants to be an investment bank in global markets,” says Vanlint.
At CITIC Securities, vice president Paulson Wang says: “We recognise integrated EDM as a critical underpinning to growing current operations as well as enabling us to manage both Chinese domestic market data and international market data in support of our growing QDII business. The GoldenSource 360 EDM platform has proven scalability across multiple lines of business, geographies and products, which is ideal to support our aggressive growth plans.”
The GoldenSource contract was signed about a month ago and work has started to put the platform in place and initially integrate Bloomberg data before adding further data sources. While this is happening, CITIC will choose other elements of a complete system such as order and execution management systems, and risk and compliance components. These will be integrated with the EDM platform. The first phase of the platform is expected to be in production in the third quarter and trading is scheduled to start before the end of the year.
With data management as the foundation layer of the international trading system, CITIC Securities hopes to deliver efficient straight-through-processing, strong risk management based on robust central data management and good decision making based on timely, quality data.
“CITIC Securities is part of a growing group of leading Chinese financial institutions that are adopting standardised reference data repositories to solve performance, risk and customer reporting related issues,” says Vanlint. Reflecting cultural sensitivities, GoldenSource has established a permanent presence in Beijing and is using a local team to implement the CITIC Securities platform.
Vanlint says the company is talking to a number of Chinese companies in the investment industry and also to insurance companies about the potential of its EDM platform. It then hopes to extend its business in China into traditional broker and custody organisations. Other market hotspots identified by GoldenSource include the US, Australia, Russia and Italy, with new client types including exchanges, regulators and federal banks.