STP runs into the Red Queen effect

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STP runs into the Red Queen effect

When markets were at dizzy heights and volumes were burgeoning the rapid implementation of straight-through processing looked to be a necessity. Now, though, developers and potential customers are taking a more sober view, not least because some markets don’t yet seem ready for T+1 settlement.

       

Not so long ago, straight-through processing (STP) was a hot topic in the financial services industry. The Global Straight-Through Processing Association (GSTPA), an industry-wide coalition of custodians, broker-dealers and investment managers, had succeeded in putting STP at the top of the agenda as the financial world moved into the 21st century. The pressure to move to a T+1 settlement cycle in the US securities markets, coupled with the explosion in trading volumes, forced the industry to look seriously at straight-through processing as a key element in coping with the workload.


With the election of Axion4gstp by the GSTPA and the establishment of Omgeo - a joint venture between the Depository Trust&Clearing Corporation (DTCC) and Thomson Financial ESG - to develop the global STP solution for worldwide markets including equities, fixed income, foreign exchange and future options markets, it seemed that it was all systems go for the move to fully automated trading and settlement.


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