Omgeo, FIX automate allocations

Deal Time means real time as automating the front and back offices meet.

Omgeo has embraced the FIX protocol for its central trade matching (CTM) service, allowing fund managers and brokers to extend straight-through processing through trade allocations.

James Drumm, Omgeo's managing director for Asia in Singapore, says while the firm has always been in the business of electronic trade confirmations, it wasn't until last year's introduction of CTM that the firm realized it had to extend its reach to allocations.

FIX is a message protocol for the front office to indicate interest in a trade; simply a standardized way to send messages. FIX has also been moving down the chain of implementing trades from its perch in the front office. "Allocations is where CTM and FIX meet; that's where the pressure point is," Drumm says.

Fund managers currently must rely on phone and fax to instruct brokers how to break down a trade that may be conducted on behalf of several portfolios. Manual intervention requires labour in the back office and also increases the likelihood of failed trades. Currently CTM or its predecessor Oasys (which remains in use among many Omgeo clients) gets involved when a fund manager's trust office sends a notice of execution to the back office for confirmation; Omgeo then automates the confirmation between the broker and the fund manager and prepares the trade for settlement.

Deal Time STP allows fund managers already using FIX to automatically communicate allocation messages with any brokers using Omgeo. Fund managers not using FIX won't see a benefit, but can continue to use Omgeo services. Brokers using Omgeo Oasys or CTM can automate allocations with any fund managers that are FIX-enabled.

Omgeo is a joint venture between Thomson Financial Services and the Depositary Trust and Clearing Corporation in New York.