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GBST’s O’Brien Discusses ITG Win, Broker Approach to Corporate Actions Processing and Asian Progress

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Following its move into the corporate actions space in November last year, GBST has bagged its first client in the form of agency brokerage and financial technology provider Investment Technology Group (ITG) and has a number of promising prospects in the Asian region poised to sign on the dotted line, says Donal O’Brien, who manages business development for GBST Global Broker Services. ITG is using the GBST Syn~ solution to meet its back office processing requirements and to manage its corporate actions processing in-house in Europe.

According to O’Brien, ITG signed up for the solution in the third quarter of last year and has now deployed Syn~BackOffice and Syn~CorporateActions after a “relatively quick” implementation process. The Syn~ products are now being integrated with ITG’s in-house developed Crystal Clear middle office system and can be accessed via Syn~ web screens to provide global 24 x 7 operation and support.

Michael Byrne, managing director and chief financial officer of ITG in EMEA, indicates that the agency brokerage, which is already a customer of GBST in Australia, chose Syn~ for its “modern architecture and real-time modelling capabilities”. The firm hopes these capabilities will allow it to react more quickly, be faster to new markets and support increasingly complex, multi-asset trading across different regions. Moreover, ITG also expects to drive down settlement cost and improve services to clients.

At the time of the rollout, the vendor formerly known as Coexis was being integrated into the overall GBST portfolio and thus the Australian parent company was able to build a global relationship with ITG, says O’Brien, who is based in Hong Kong. The corporate actions solution has proved popular within the Asian region, he claims, although it has gone through a series of changes since it was first launched. “Over half of our current broker customers in Asia have demonstrated an interest in the corporate actions solution so far,” he says.

The interest from the broker community has grown over the last two years from practically nothing, as these firms use the automation of corporate actions as a competitive differentiator in terms of higher STP overall. “Our corporate actions platform was originally built as a large heavy ended engine for the high end users within the securities processing world, as well as vendors. However, we have been compelled to change the focus slightly because we have seen a lot of demand from the broker community and they have very different requirements from the asset servicers,” explains O’Brien.

The solution needed to be “agile and adaptive” to meet the needs of this particular demographic, especially in the Asian region. “In Asia, any solution that is offered here needs to be very agile as every country is very different and there is tremendous variation in the types of corporate actions and products across the region. There are also no common operating models,” elaborates O’Brien. Scale across a diverse range of complex markets has therefore become a competitive differentiator for brokers in this region.

The brokers have been forced to invest in corporate actions processing, which is a non-traditional vendor investment for the community, due to the pressures of increasing volumes of this data. Rather than traditional asset servicers, however, the focus is on speed and risk mitigation for the broker community. The prevention of late and open trades is more important than end transparency for clients, for example.

O’Brien reckons the fact that its corporate actions solution is already integrated into the overall Syn~ package makes it appealing for the broker community, as many of them have already invested in the back office processing component and thus extending to corporate actions is not too challenging. “The integration of a corporate actions solution into downstream processes is usually the most challenging aspect of an implementation,” he explains.

The vendor has therefore been able to “think the way brokers think”, claims O’Brien, and allowed for the automation of corporate actions in a seamless manner. The “obvious lead markets in the Asian region” have displayed an interest in the solution, including Japan, Australia, Singapore and Taiwan. “Korea has also been particularly hot on corporate actions,” adds O’Brien.

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