SOLUTION SPOTLIGHT

SunGard to Launch International Order Routing Service

The importance of securities lending to the profitability of financial institutions continues to grow, as more market and trading structures integrate securities finance transactions into their strategies. As a result, the securities lending environment demands a higher degree of straight-through-processing than ever before, from trade origination through to final settlement.

Securities lending administration systems and operational procedures have responded to this demand by building out automated interfaces to downstream settlement mechanisms, as well as community-based networks linking industry participants together to ensure that the books and records of individual participants are kept in sync.

However, less attention has been paid to the straight-through processing needs of the securities lending front-office. A substantial portion of even the most routine front-office trade processing remains highly manual and labour-intensive. Traders expend a great deal of time and energy on routine transactions that interfere with their ability to focus on more profitable and higher value activities. The trail of automation that benefits downstream settlement and reconciliation frequently begins with manual trade ticket entry into securities lending administration systems.

In the US, automated front office trade origination and negotiation platforms such as Loanet Centralized Order Routing (LCOR) have led to a nearly STP lending environment within the equity and corporate general collateral markets. LCOR links more than 100 borrowers and lenders together in a real-time order processing environment, handling more than $100 billion in order flow daily. SunGard is now expanding this offering to extend the same straight-through processing capability on an international scale, with LCOR International.

LCOR International is a real-time, high volume, community-based network that links lenders and borrowers together through the same secure messaging infrastructure as the highly successful U.S. version of LCOR. Available during all international trading hours (24 x 7), the service minimizes processing delays and improves operational efficiency by enabling straight-through processing for international customers.

How It Works

With LCOR International, borrowers submit borrow orders based on their needs to their preferred lenders. The lender receives these orders and processes the orders in their securities lending system. Loan requests are sent back to LCOR International, which accepts the requests and compares the loan data against the borrower's pre-defined thresholds to determine if the loan request meets the borrower's needs.

An accepted loan request will generate a trade execution notification to both the borrower and the lender. The lender is notified immediately of a rejection, and the Borrower is notified when a lender cannot lend the security or the borrow order has timed out. The borrower is free to make the same request of a different lender.

Through the use of LCOR, global firms can greatly improve operational efficiency and accuracy and reduce workload though a centralized location to communicate borrow and loan orders. LCOR International allows you to leverage your existing international settlement networks by ensuring accurate and confirmed trade instructions, which ultimately result in reduced reliance on telephone or email negotiations, trade entry and trade confirmation review.