CSA: Most firms behind schedule on STP

(September 19, 2003) Only half of market participants believe they are prepared to adopt straight-through processing (STP), but they might be over-optimistic, according to a survey by the Canadian Securities Administrators (CSA).

The survey showed 52% of respondents said they were ready to switch to a fully automated system of processing securities transactions, but when asked specific questions about their preparedness, 55% of this group reported no STP-related spending last year, with many not planning to open their wallets to the project before 2005.

The CSA says industry players don’t seem to recognize the complexity of adopting the STP system.

“Achieving STP readiness industry-wide by mid 2005 is a lengthy and complex undertaking that requires that firms plan and budget activities several years in advance of the deadline,” said Stephen Sibold, chair of the CSA. “The apparent disconnect between firms’ self-assessments of their readiness and the actual level of preparations they have underway suggests that we need to take a closer look at industry’s state of readiness.”

The survey showed more 34% of respondents were more realistic, admitting they were not prepared for the switch, and 15% did not know.

The study also showed that only 21% of respondents believed there were few impediments to implementation, but there was also little sense of urgency. They often said there were other business imperatives that superseded STP implementation.

Filed by Steven Lamb, Advisor.ca, slamb@advisor.ca