Smartstream launches ETC application

The product provides financial institutions with paperless reconciliation between internal order management and trade processing systems, and their external ETC provider on the broker side. It also eliminates the operational risks inherent with manual re-keying of information and communication by phone or fax - both major areas that need to be addressed in the drive towards the straight-through processing (STP) of trades.

Smartstream ETC's generic matching capability enables interoperability with a range of order management, trade processing and ETC systems, as well as supporting a number of exchange file formats including Oasys, Swift and proprietary feeds for inbound and outbound communication.“SmartStream ETC was developed in conjunction with a leading European bank, and is now in live production,” said Darryl Twiggs, SmartStream Technologies’ product manager for ETC.

“Key to the development was the inclusion of the investigations capability, enabling the bank to increase straight-through-processing rates and reduce risk exposure,” he added.

The system operates at both block and allocation level. Following the receipt of trade notification, the individual orders of the investment manager can be reconciled with those of the broker’s block allocation, eliminating the laborious and often-erroneous manual communication process.Assuming all details are correct, SmartStream ETC will automatically generate an affirmation to the ETC system. It can then go on to match contracts at the allocation or individual trade level. And for successfully matched transactions it generates an affirmation of the allocated trade to the ETC system and automatically confirms the trade to the custodian allowing the transaction to be settled. Any broken trades are delivered to the relevant party for repair.

“This is just one of a number of focused modules which SmartStream Technologies is developing to enable financial institutions to meet the demands of STP and reduce operational costs,” said Twiggs.