Though the demise of the Global Straight Through Processing Association has many saying that Omgeo is now the only post-trade game in town, Financial Models Company of Canada says it will be of offering a very real alternative to Central Trade Manager.
FMC plans to go live with the next-generation version of its network, FMCNet II, around April. The enhanced network will feature Web-based capabilities, XML technology to facilitate connectivity with other networks, the ability to send indications of interest and other pre-trade information, and central-matching services.
Companies like FMC, the GSTPA and Omgeo are focused on matching post-trade, pre-settlement institutional-trade details among investment managers, broker/dealers and custodians.
But unlike Omgeo, which is actively encouraging its clients to embrace CTM, and has spoken of eventually moving all clients to the new central-matching platform, FMC President Stamos Katotakis says it doesn't matter to him whether his clients match centrally or locally.
FMCNet II, he says, will continue to support local matching, something that many in the industry feel is just fine for now.
"We are happy to have clients determine what kind of matching they are going to use," says Katotakis. "We clearly feel that forcing clients in this environment is not something that anybody that has a sane approach to things wants to do. I don't think that anybody has the ability to force investment managers to act in a particular way. People only do things if it makes economic sense."
He says that the current economic environment, combined with the effectiveness of existing local-matching solutions and the high rate of same-day affirmations they offer, means that the seemingly cool reception to central matching could continue for some time.
The GSTPA, which announced that it would cease operations and enter bankruptcy a few weeks ago, experienced that cool reception first hand when it tried to coax investments managers into processing trades through its Transaction Flow Manager. The fact that it did not have an existing business, unlike Omgeo and FMC, meant it could not survive a slow start.
"My impression right now is that local matching is good enough," says Katotakis. "Central matching requires a radical shift in the way the industry is working today and right now the industry is not willing or ready to throw things out."
However, he says that the idea of central matching is a good long-term industry goal that will eventually be embraced.
Katotakis says that Omgeo would be foolish to think of FMC as a Canada-only player in the post-trade information-communication space and adds that his company has a significant global presence.
He says, "If anyone is keen on exploring central matching, we have a terrific story to tell and terrific technology. We know this business because it is something we have been doing for a long time."