In a global roll-out, JPMorgan Worldwide
Securities Services ( JPMorgan WSS) will go live with automated managed fund
transactions through the SWIFT network in the second half of the year, joining
HSBC Securities Services, RBC Dexia and Vanguard Investments, who became
cornerstone users of the technology in Australia last month. The
transactions cover applications, redemptions, confirmations, status reports and
reporting, which are sent using SWIFT Funds ISO20022- compliant messages across
the SWIFT network.
SWIFT estimates that manual transaction processes cost $20
per trade, while the initial price of a domestic automated trade is $0.12, with
the non-profit SWIFT taking a tiny clip as a message fee. Five other companies
have committed to making the upgrade – BNP Paribas Securities Services (BNP
PSS), Barclays Global Investors, Macquarie Wrap, National Custodian Services
and Ausmaq. It is understood Macquarie Wrap will make the change in 2010 and has
already talked to managers about pricing incentives to transact with it through
the new SWIFT messages.
BNP PSS confirmed that it would also go live in 2010. “We’re
impressed with the risk and cost reductions provided by the system,” a
spokesman for the custodian said. Westpac-owned BT Wrap was part of a group
that piloted automation in September 2007, but has not progressed due to the
distraction of integrating St George Bank systems. Within JPMorgan WSS, the
global implementation of automated systems is being coordinated from the
custodian’s UK
office. “The pilot demonstrated that SWIFT works, that the messages are the
right shape.
Now it’s down to uptake by the industry,” David Braga, head of
product at JP Morgan WSS in Sydney,
said. The Sydney arm of JPMorgan WSS currently
sends and receives faxes “in the multiples of thousands” each month, according
to Braga. A
broad adoption of automation by funds managers would eliminate most of that
paper correspondence, but in the meantime the custodian will run fax and
automated systems side-by-side.
Certain communications, such as a manager’s
notification of a new fund or change of broker, will still need to be conveyed
by fax. Tim Hamer, commercial manager for SWIFT in Australasia,
was confident that all members of the pilot would go live with automated
processes in the near future. “People are working at different speeds. But they
can take confidence in the fact that they’ve declared to each other they will
be live by the end of this year,” Hamer said. “Our focus is on those players
with higher volumes. Between themselves they can cut out, or automate, a lot of
their daily transactions.
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