Straight through processing is a by variablepitch345

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Achieving STP Today

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traight through processing is a strategic imperative today and is required by all financial institutions in order to achieve operating efficiencies, and reduce costs and operational risk. STP can be achieved today within an institution by integrating its heterogeneous systems environment in the front and back office. STP can also be achieved today between institutions by seamlessly connecting the systems on the buy-side with systems on the sell-side and with settlement agents.

number of today’s trades involve manual processes for at least some phase of the transaction,” explains Mark Volker, senior vice president for business development at SunGard Financial Networks. “Even though a decision on T+1 was postponed until 2004, firms can gain immediate benefits with STP solutions that are available today, and that can improve throughput, capacity, and accuracy.”
Key components of <STN> include:

With a single SunGard relationship, clients can fully automate the entire transaction lifecycle for different asset classes, cross border, with all of their existing business partners, and also integrate seamlessly with their existing applications. More than 1,500 firms participate in <STN > today. The SunGard Transaction Network <STN> connects different parties in the financial marketplace to achieve straight-through processing. <STN> consists of a growing number of hubs, each focusing on a specific market segment, connecting SunGard with SunGard and third party solutions. The SunGard Transaction Network helps clients achieve operational efficiency and operational resilience. Improving operational efficiency in today’s markets requires a focus on STP SunGard . helps clients realize STP through internal and external integration. We link our best-ofbreed solutions in the buy-side and sell-side. Combined with seamless connectivity to partners and counterparties, SunGard offers a comprehensive, end-to-end STP solution to virtually any market participant. The most costly part of a trade is the cost of intermediating the trade. The Plexus Group estimates that an average of 100-200 basis points may be lost through inefficiencies in the trading process. “A significant 1

<STN> EQUITIES connects equity investors with brokers, market makers, ECNs, and other liquidity pools. It links systems in asset managers and trust companies with order management systems on the sell-side. By beginning trade automation at trade inception, it also positions the originating manager for use of <STN> Post Trade Services, to complete the post-execution trade process.
<STN> FUNDS connects investors with mutual fund families—linking systems in employee benefit administrators, asset managers and trust companies with systems of mutual fund families and transfer-agents. <STN> FIXED INCOME is a real-time, secure and efficient trading platform that supports the collection, management, display and execution of fixed income security offerings. <STN> MONEY MARKETS offers easy-to-use Internet trading for a range of money market products including commercial paper. By linking buyers with primary dealers and issuers, efficiency is brought to this otherwise manual environment. <STN> POST TRADE SERVICES streamlines post-execution trade operations with asset managers, broker/dealers, custodians and clearing agencies. <STN> Post Trade

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Services automates the trade matching and affirmation process, offers seamless pathways for trade allocations and provides full integration of bank letters and bank notifications. Further, early adoption of these technologies positions market participants squarely in the forefront of trade automation, preparing them now for the move to virtual matching utilities and shorter settlement cycles.

CASE STUDIES

Navellier, a quantitative/fundamental analysis and fund firm based in Reno, NV, uses <STN> Post Trade Services to automate the confirmation and trade affirmation processes, as well as trade allocations for its sponsored WRAP program management. Navellier was able to reduce its 19-hour trade matching and affirmation process, to only 2 hours with <STN> Post Trade Services. Employees no longer work late hours and are able to process information automatically via advanced scripting. SunGard was also able to significantly reduce Navellier’s trade-confirm download time from a nearly day-long process to only 2.5 minutes. In addition, <STN> automated Navellier’s WRAP program’s trade allocation process, which previously included 20-30 page faxes of detailed allocation data. Navellier and SunGard worked cooperatively to automate the process of communicating block-trade allocation instructions that spanned hundreds of individual accounts. Wasatch Advisors specializes in managing assets for institutional and individual clients www.wallstreetandtech/stpchallenge.com

through investments in small and mid-size companies. After implementing <STN> Equities for order routing from its FIXenabled order management system, Wasatch was able to quadruple trading volume with no increase in trading staff. Enabling automated trade-order routing allowed its traders to devote more time and energy to generation and execution of actual trades. CMC Interactive, LLC, a Manhattan-based 401(k) service plan provider targeting the small to mid-size markets, was able to cut out the middleman, automate the 401(k) fund-trading process, reduce costs and sign on new clients with <STN> technology. “SunGard’s systems allow our plan sponsors to get information, download reports and run live reports. It saves us time, money and ultimately gives cost savings to our customers,” explains Michael Calandra, Principal, CMC Interactive, LLC. The seamless link between SunGard’s Relius™ Administration (recordkeeping software) and <STN> enables CMC Interactive to automate trading on an omnibus level. Plan sponsors and participants have direct access to their accounts maintained on Relius through the Web and Voice Response Unit (VRU). “We put all our eggs in the SunGard basket. SunGard listens to our needs in order to take the product to a higher standard,” explains Mr. Calandra. “SunGard's strategy is to be the most efficient processor of transaction flows between the buy-side and sell-side with the fastest and most cost-effective technology infrastructure,” explains Mr. Volker. “The SunGard Transaction Network recently signed up its 500th client for equities trading and is now also the third largest mutual fund trading network in North America. That is STP. That is SunGard today.”

SunGard
www.sungard.com 55 Broadway New York, NY 10006 Phone: (212)809.3078 Karen Genicola E-mail: karen.genicola@sungard.com URL: www.sungard.com

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