by Craig Donner
Investment Technology Group (ITG), an independent agency broker and financial technology firm, has joined the growing roster of firms reaping the benefits of institutional netting offered by ID Net.
ID Net extends the benefits of netting to institutional trade settlement by giving broker/dealers the ability to combine their eligible and affirmed institutional equity transactions with their Continuous Net Settlement (CNS) transactions. This reduces delivery fees and movements to and from accounts, helps mitigate operational risk and decreases costs across the clearance and settlement process.
"As ID Net gains critical mass, the service's benefits extend more widely, enhancing processing efficiency for matched institutional trades and encouraging timely affirmation," said Susan Cosgrove, DTCC managing director, Clearance and Settlement/Equities.
Two firsts for ID Net
The addition of ITG represents an important step in broadening the reach of ID Net because its trade processing is handled by SunGard Stream Phase3, which recently became the first application service provider (ASP) for broker/dealers to support ID Net. ITG is, in turn, the first broker/dealer to use SunGard's solution to access ID Net.
"SunGard and ITG are breaking new ground with the Stream Phase3 solution, which opens the door for more of SunGard's broker/dealer customers to access ID Net," said Stephen Wasserman, DTCC director, Clearance and Settlement/Equities. "In addition, ITG's leadership as an early adopter of ID Net will help continue moving the industry in the direction of institutional netting."
Stream Phase3 is a real-time, global multi-asset securities processing solution that provides full processing support for ID Net, including real-time functionality to help broker/dealers streamline the clearance and settlement process and reduce exposure. ITG, which has been a customer of Stream Phase3 since 2006, began using the system's ID Net processing capability in June 2010.
"As the volume of institutional trading grows, the number of steps, risks and costs in the overall clearance and settlement process also increases," said Gerry Murphy, president of SunGard's brokerage and clearance business. "We continue to adapt to an ever-changing industry, and we are pleased to help ITG become an early adopter of the ID Net service and Stream Phase3's ID Net processing."
For ITG, the opportunity to pay a reduced institutional delivery settlement fee of only 2½ cents for all ID Net-eligible trades (vs. 5 cents for all other institutional trades) was a key driver in joining the service, along with the potential to reap additional savings through lower CNS and Inventory Management System costs.
"The ID Net capability of Stream Phase3 is particularly useful for institutional broker/dealers such as ITG," said Tony Portelli, managing director and head of operations at ITG. "With products such as Stream Phase3, SunGard helps us efficiently manage high-volume and high-value institutional trade processing while reducing transaction fees and costs."
ID Net is a joint offering of NSCC and DTC, in collaboration with Omgeo, DTCC's global joint-venture company that provides post-trade processing services for the institutional marketplace. @
[To learn more about ID Net, contact Stephen Wasserman, DTCC director, Clearance and Settlement/Equities, at email@example.com or 212.855.3270.]