Committees: Straight Through Processing Committee
The STP Committee coordinates buyside goals to enhance processing efficiencies. STP is an automated system to system environment that allows the continuous electronic flow of all types of transaction data, both to and from external parties from inception to settlement to reconciliation without the need for intervention by any participants in the transaction. This committee coordinates its work with regulators, utilities, vendors, and specifically, The Bond Market Association’s STP Steering Committee.
In 2005 the STP Committee efforts were largely focused on compiling a best practice document with timframes for block-level matching and allocations communication. In 2006 the STP Committee is planning to build on the best practice efforts by exploring metrics to gage adherence to recommended timeframes. Other focus areas in 2006 are:
- Standing Settlement Instructions -- improving data quality and functionality of SSI databases
- PSET or Place of Settlement and delivery instructions -- ensuring that electronic trade confirmation matchin criteria addresses PSET and delivery instructions to mitigate fails
- Security Data -- improving the quality of security data utilized by trade counterparties
March 29, 2007 — AMF STP Committee: Standing Settlement Instructions
As you are aware, one of the major goals of the AMF STP Committee this year is to improve the quality of standing settlement instructions, as incorrect instructions continue to contribute to a large number of fails.
The Reference Data Working Group of ISITC is also working toward this end. An important step in this process is for industry participants to agree on the standard minimum data elements that are required to populate the SSI databases in ALERT and AccountNet. ISITC has documented these data elements in the attached DRAFT Standing Settlement Instruction (SSI) Best Practice Guideline.
Please note that ISITC’s SSI Best Practice is the first and important step in the standardizing SSI data and does not address the feasibility of custodians directly uploading SSI information to the two vendor databases, which is a goal of the AMF STP Committee.
We are circulating this draft to the AMF STP Committee members so that you may familiarize yourselves with these data elements and provide any feedback and/or comments. These data elements will be finalized in the end of April, so please send your comments by April 11th. Comments may be sent to Elisa Nuottajarvi of the AMF staff at enuottajarvi@sifma.org.
Simultaneously, the AMF STP Committee leadership Jon Ambos of Deutsche Asset Management and Christian Barsanti of Prudential Investment Management are planning to meet with Omgeo representatives on April 12th to discuss the SSI project and the following agenda items: 1) Alert Plus functionality, 2) Does Alert Plus meet ISITC Reference Data Committee standards for SSIs, 3) Custodian buy-in for the new upload template, 4) Plans for clean-up/validation of existing data in Alert, 5) Future Plans for Custodian/IM shared entry where Alert Plus has pre-populated SSIs for custodians who sign-up, 6) Future plans for Alert Plus, Integration with TradeWeb. We will send the STP Committee members meeting notes from this meeting to update you on developments.
If you have any questions on the above items, please contact AMF staff: Elisa Nuottajarvi (tel. 646-637-9266) or George Reis (tel. 646-637-9280).
Thank you for your interest and cooperation.
October 31, 2005 — AMF STP Committee Recommends Best Practices
The AMF STP Committee, chaired by Christian Barsanti of Prudential Investment Management and Chris Palmer or Goldman Sachs Asset Management, has recommended best practices relating to block level matching and allocations. These recommendations are the first release in the best practice initiative that began as the SEC published a concept release on securities transactions settlement which discussed the possibility of mandating trade date confirmation and affirmation. The AMF responded to the release by ensuring the SEC that asset managers would support and encourage voluntary STP initiatives. In addition to the now released recommendations relating to block level matching and allocation communication, the AMF STP Committee will define best practices for confirmation matching, security data and performance measurements.
The recommendations state that block level matching, communication of allocations, confirmations and affirmations should occur via automated systems to increase timeliness and accuracy. The block level match should occur within 30 minutes for electronic automated matching and within one hour for manual matching post trade execution. Allocations should be communicated within one to three hours of the block level match based on settlement timeframe as well as the allocation delivery method. The document spells out specific recommended time requirements by settlement timing.
The STP Committee presented the best practice recommendations at the AMF Quarterly Meeting on 9/22 to the asset management community. On 11/3 the Committee has representatives at a panel which will publish the recommendations at The Bond Market Association's Fixed Income Operations Conference, with a large sellside audience.
These best practices are open to comments from the AMF membership. Any feedback should be sent to Elisa Nuottajarvi of the AMF staff at Elisa Nuottajarvi.