| Kevin Milne | ||||||
Over the past year, straight-through processing (STP) has become something of a buzz phrase in the wholesale securities markets. Everyone talks of its importance, but progress toward the goal of 100% straight-through processing in trading has been slow and arduous, characterized by a lack of cooperation between the main technology players and foot-dragging on the part of many investment firms. Failure to cooperate between the industry leaders could hold the whole process back.
STP is needed for straightforward reasons. In a world of rapidly increasing trade volumes, shorter settlement times and shrinking margins, STP offers greater operational efficiency, less exposure to market risk and - for the proficient - opportunities to win new sources of revenue. The push to shorten settlement from a three-day cycle (T+3) to next-day settlement (T+1) in the US has accelerated the need to develop widely-accepted STP solutions.