Lion Global moves to greater trade automation

The Singaporean asset manager is aiming to boost straight-through processing rates for its fixed-income transactions to hit 75% by the year's end, from 45% now.
Lion Global moves to greater trade automation

In a drive towards greater straight-through processing, Lion Global Investors is aiming to hit 75% automation rates for its fixed-income trades before the end of this year, up from 45% now.

The Singaporean fund house plans to achieve this through an initiative it started in recent months to shift all its counterparty banks onto Omgeo Central Trade Manager for electronic trade confirmation.

James Tan, Lion Global’s chief operating officer*, sits on the advisory board at software vendor Omgeo and wants to see the fund house’s counterparty firms make the move away from faxes. It has already done so for equity trades, where it has a 98% STP rate.

The firm has several high-volume relationships with banks particularly for Singapore dollar fixed-income, including with DBS, OCBC, UOB and foreign firms including HSBC and Standard Chartered.

Lion Global’s move towards more use of STP will boost efficiency in terms of the fund manager’s relationship with its parent, S$43 billion insurance group Great Eastern Holdings, says Tan.

Not only will the initiative boost Lion Global’s ability to service its clients, he adds, but they should also stand it good stead as it seeks to expand its overseas funds business.

The shift to greater automation dovetails with other recent moves by the S$28 billion asset manager. The firm went live with the reconciliations part of the business – which has been outsourced to parent OCBC – earlier this year.

As a result, the Swift statements from its custodians are fed to the bank, together with portfolio data for cash and positions, which then alerts Lion Global to any unmatched items.

“OCBC already had the team and the system set-up [to do this], so we could set it up within six months,” says Tan. “If we had to implement it ourselves, it probably would have taken the same time but cost a lot more money.”

He has also been working on implementing a risk management set-up for the past year or so, putting in place a series of new policies covering areas from operational to liquidity to market risk.

* See the latest (June) issue of AsianInvestor for an in-depth interview with James Tan.

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