Automated securities trading to save $140 million annually, study concludes
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Automated securities trading to save $140 million annually, study concludes
operational risks and financing cost savings ($45 million) operational risks and financing cost savings ($45 million) operational efficiency gains ($42 million) transaction correction cost reductions ($35 million) new revenue sources ($10 million) infrastructure savings ($5 million) “The reduction in cost and risk associated with implementing STP in the securities industry will result in better service, […]
By Doug Watt|
November 19, 2002 |
Last updated on November 19, 2002
2 min read
operational risks and financing cost savings ($45 million)
“The reduction in cost and risk associated with implementing STP in the securities industry will result in better service, better prices and increased competitiveness of Canada’s capital markets,” says CCMA president Thomas MacMillan. “Using the study’s methodology, each company should be able to estimate its own benefits from implementing STP.”
Cap Gemini Ernst and Young did not examine how much it will cost to implement STP, noting that figure will vary considerably, depending on a firm’s size, market share, business strategy and current level of STP readiness.
However, CCMA adds that many survey participants believed the study’s financial conclusions were conservative, since they excluded savings that could not be easily quantified, such as cross-border and retail trades and expected increases in annual trade volume.
“The reduction in cost and risk associated with implementing STP in the securities industry will result in better service, better prices and increased competitiveness of Canada’s capital markets,” says CCMA president Thomas MacMillan. “Using the study’s methodology, each company should be able to estimate its own benefits from implementing STP.”
Cap Gemini Ernst and Young did not examine how much it will cost to implement STP, noting that figure will vary considerably, depending on a firm’s size, market share, business strategy and current level of STP readiness.
However, CCMA adds that many survey participants believed the study’s financial conclusions were conservative, since they excluded savings that could not be easily quantified, such as cross-border and retail trades and expected increases in annual trade volume.
“The reduction in cost and risk associated with implementing STP in the securities industry will result in better service, better prices and increased competitiveness of Canada’s capital markets,” says CCMA president Thomas MacMillan. “Using the study’s methodology, each company should be able to estimate its own benefits from implementing STP.”
Cap Gemini Ernst and Young did not examine how much it will cost to implement STP, noting that figure will vary considerably, depending on a firm’s size, market share, business strategy and current level of STP readiness.
However, CCMA adds that many survey participants believed the study’s financial conclusions were conservative, since they excluded savings that could not be easily quantified, such as cross-border and retail trades and expected increases in annual trade volume.
(November 19, 2002) A study estimates that adopting a fully automated system for securities trading, known as straight-through processing (STP), would save Canadian industry participants as much as $140 million a year.
The Canadian Capital Markets Association commissioned Cap Gemini Ernst and Young to quantify the benefits of STP and one-day settlement of trades, known as T+1. However, since the study was commissioned, the move to T+1, scheduled for 2005, has been put on hold.
Securities officials on both sides of the border say they need to work on making STP a reality before evaluating the conversion from T+3 to T+1. The T+1 issue will likely be revisited in 2004.
With STP, trading procedures are automated from start to finish, with no manual intervention or data entry.
The study revealed total STP and T+1 savings of $190 million, with $140 million directly linked to STP in five specific areas:
operational risks and financing cost savings ($45 million)
“The reduction in cost and risk associated with implementing STP in the securities industry will result in better service, better prices and increased competitiveness of Canada’s capital markets,” says CCMA president Thomas MacMillan. “Using the study’s methodology, each company should be able to estimate its own benefits from implementing STP.”
Cap Gemini Ernst and Young did not examine how much it will cost to implement STP, noting that figure will vary considerably, depending on a firm’s size, market share, business strategy and current level of STP readiness.
However, CCMA adds that many survey participants believed the study’s financial conclusions were conservative, since they excluded savings that could not be easily quantified, such as cross-border and retail trades and expected increases in annual trade volume.
(November 19, 2002) A study estimates that adopting a fully automated system for securities trading, known as straight-through processing (STP), would save Canadian industry participants as much as $140 million a year.
The Canadian Capital Markets Association commissioned Cap Gemini Ernst and Young to quantify the benefits of STP and one-day settlement of trades, known as T+1. However, since the study was commissioned, the move to T+1, scheduled for 2005, has been put on hold.
Securities officials on both sides of the border say they need to work on making STP a reality before evaluating the conversion from T+3 to T+1. The T+1 issue will likely be revisited in 2004.
With STP, trading procedures are automated from start to finish, with no manual intervention or data entry.
The study revealed total STP and T+1 savings of $190 million, with $140 million directly linked to STP in five specific areas:
operational risks and financing cost savings ($45 million)
“The reduction in cost and risk associated with implementing STP in the securities industry will result in better service, better prices and increased competitiveness of Canada’s capital markets,” says CCMA president Thomas MacMillan. “Using the study’s methodology, each company should be able to estimate its own benefits from implementing STP.”
Cap Gemini Ernst and Young did not examine how much it will cost to implement STP, noting that figure will vary considerably, depending on a firm’s size, market share, business strategy and current level of STP readiness.
However, CCMA adds that many survey participants believed the study’s financial conclusions were conservative, since they excluded savings that could not be easily quantified, such as cross-border and retail trades and expected increases in annual trade volume.
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