One week after the official launch of Omgeo, the eagerly awaited central matching and trade confirmation service provider has begun to shed light on its strategy for Asia. The full extent of its plans will be outlined when the companys new president, Adam Bryan, visits the region next week.
Bryan is likely to confirm that Omgeo, the joint venture between The Depository Trust & Clearing Corporation (DTCC) and Thomson Financial, will build on the strong product penetration Thomson ESG has in markets like Australia and Hong Kong, by approaching fund management firms in other domestic markets. The first targets will be Taiwan, Korea and India.
A few months ago we hired a country manager in Korea to focus entirely on local client business, and we have just done the same in India, says Jim Drumm, Omgeos managing director of Asia Pacific. We are much further along the product penetration curve in markets like the US and Europe, so the next few months will see us put a lot of effort into encouraging large domestic institutions to use our service. Once this is done, the broker business should follow. He says that aside from Korea and India, the company has on-the-ground presence in three other Asian markets.
Omgeo will be offering clients two former Thomson ESG products including ALERT, a settlement instructions software, and OASYS Global, an electronic trade confirmation engine. Drumm says these products will position users to take full advantage of Omgeos new Central Trade Manager (CTM) platform due for release in the fourth quarter of this year. CTM is an intelligent matching engine. Every trade that is entered into the system is linked to settlement instructions, ensuring straight through processing of trades.
Fortunately for Drumm and his team, Omgeo in Asia is not burdened by many of the integration and interoperability issues that encumber the company in the US. The DTCC and Thomson ESG are still trying to work out how to integrate the institutional pre-settlement products and the standing instructions databases of the two firms. TradeSuite is the DTCCs main engine which process almost 95% of trades executed in the US. The plan is to link CTM with TradeSuite and eventually integrate the two.
At the same time, Omgeo is faced with competition from the Global Straight Through Processing Association (GSTPA) which plans to launch a similar central matching engine later this year called Transaction Flow Monitor (TFM). Market participants are calling for interoperability between Omgeos system and GSTPAs so that they are not forced to be compliant with two platforms.
Drumm says, for the moment, these issues are not impacting his plans for expansion in Asia. Here there is no legacy with TradeSuite which has primarily been a US product. That means we can focus entirely on selling OASYS Global and ALERT to institutional investors and brokers.
How Omgeo will compete with local providers of trade confirmation and settlement instruction engines has not yet been revealed. On his trip to Hong Kong next week Bryan is likely to be asked whether Omgeo plans to pull these smaller players into its system through a series of mergers and acquisitions.