Wall Street & Technology is part of the Informa Tech Division of Informa PLC

This site is operated by a business or businesses owned by Informa PLC and all copyright resides with them. Informa PLC's registered office is 5 Howick Place, London SW1P 1WG. Registered in England and Wales. Number 8860726.


01:31 PM
Connect Directly

Decisions, Decisions

The GSTPA mulls its choice for the industry's first model to share post-trade, pre-settlement data on cross border trades.

All is quiet. The RFIs are in. The industry waits patiently for the final word. Who will it be? A consortium bidding together? One picked a la carte by the Association? A group of two? four? three?

At this point nobody knows, not even KPMG partner C. Steven Crosby, who will work day and night reviewing and selecting bids for the GSTPA. And although part of the second phase of the project has been completed'on August 24, 22 bidders submitted responses to a request for information'there is still a long road ahead. Next KPMG and the GSTPA have to choose the right consortium or assemble one from the responding bidders by Thanksgiving. Following, heavy due diligence begins, where KPMG and GSTPA will discern whether what these groups are proposing is actually feasible'fiscally and technologically.

But for now the fun begins for Crosby and his group at KPMG, who have been selected by the GSTPA to choose the best of the best.

What the GSTPA is trying to create is a work flow engine-dubbed "a Transaction Flow Manager (TFM)"--that will make information available at one central location by investment managers, broker/dealers and custodians at the post-trade/pre-settlement phase of a transaction. This will be used for cross border trades only, to speed settlement, reduce risk and facilitate the U.S.-s move toward T+1.


Mum has been the word on the precise questions appearing on the request for information'as all bidders are bound by strict confidentiality agreements. That said, Anthony Kirby, executive director of the GSTPA, explains that the GSTPA is looking for an applications developer to build the transaction flow manager (TFM), a network services provider for messaging capabilities, a facilities manager to house the TFM and an operator to run it as a business. The final selection could be one firm or four firms, Crosby adds.

The application developer will be in charge of building the TFM by assembling the components and adding the newly developed pieces necessary to meet the requirements laid out in the RFI. Most industry officials believe that the winning bidder for the application development piece will cull different components to build the project and not try to create the TFM from scratch. Otherwise the GSTPA would have a difficult time meeting its aggressive deadline of a phase one roll out by early 2001.

Crosby agrees that the industrial strength workflow technology is "designed to focus on component architecture ... that is not to say there isn't bespoke work in it, but it's not like we're saying here's a blank sheet of paper, build it from the ground up."

The network services provider is also expected to look outside its home inventory to build the far-reaching network needed to fit the global project's bill. The network services provider is expected to use an existing network, but also consider linking with other network providers to create the necessary global network.

The facilities manager will run the data center'making sure it has the security, redundancy, contingency as well as fits rigorous performance requirements. These three components are all very important, but the most important aspect of the project seems to be the operator.Crosby says that this is "the most interesting part of the equation." The piece of the puzzle that most people omit when they think of outsourcing is the running of the business, he says. Often people get caught up in the technology and the people, which are important, but "they don't think about things like ... sending the bills out, making sure you have the reporting in place."


Steve Webb, GSTPA global bid director for Cap Gemini, says Cap Gemini is bidding for the operator portion of the project. Webb adds that GSTPA and KPMG are looking for "an imaginative and constructive bid," when it comes to technology, management, operations and a cost structure. Many bidders have used words such as "thought leadership," "bright ideas," noting that GSTPA is looking for more than precision in the context of detail at this stage. "They are looking for the vendors to provide their intellectual property as to how this can be made to work," adds Webb. Furthermore, Kirby points out the importance of using XML to create an open architecture, as well as highly encrypted PKI technology for security. And both Kirby and Crosby emphasize the importance of using components to keep the industry utility current from year to year. "By having components, you can take out a component and slide in another one over time, to always have best of breed and the most current technology. Part of what we are looking for here is a long service life," Crosby says.

1 of 2
Register for Wall Street & Technology Newsletters
Exclusive: Inside the GETCO Execution Services Trading Floor
Exclusive: Inside the GETCO Execution Services Trading Floor
Advanced Trading takes you on an exclusive tour of the New York trading floor of GETCO Execution Services, the solutions arm of GETCO.