State Street Investor Services claims to have improved its capability to perform derivative transactions, going live this month with new Swiftnet messages which can communicate in financial product market language(FpML)for the first time.

Neil Wright, senior vice president of State Street IS, said FpML was widely recognised as the established standard for communication of electronic information related to OTC derivative transactions. Swiftnet has been working with the International Swaps and Derivatives Association (ISDA) since June 2006, culminating in an eight-month pilot study, to develop fixed FpML messages that would allow communication of OTC derivative transactions to benefit from the speed and security of Swiftnet messages. “It is the most efficient and cost-effective way of communicating exchange trade notifications between asset managers and custodians” Wright said. The messages can currently deliver trade notifications and trade contracts for OTC derivatives. A second tranche scheduled for the second quarter of next year plans to include trade confirmations. Steve Farrage, head of Swift Australia, said transactions via Swiftnet will reduce processing costs by 40 per cent – or at least $US50 per trade. State Street IS has also built a proprietary dashboard on its web site to receive information from the investment management system software provider, Charles River, designed to improve accessibility and reduce the amount of time spent on searching. Charles River was implemented to provide real-time market data, enabling State Street to improve the frequency and sophistication of its mandate monitoring.

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