New STP Service for the Automation of Transaction and Market-Related Claims intended to become Industry’s Standard Procedure for Settlement of Back-Office Disputes
Sun Microsystems, Inc. (NASDAQ: SUNW), Metatomix Inc. and Claimonitor Ltd. today announced the development of Claimonitor, a new Web-based STP (Straight-through Processing) utility for automating transactions and market-related claims in the global custodian, investment banking, asset management and broker communities.
The new standards-based automation utility, scheduled to go live in July 2005, provides a solution for the STP trade cycle area of post-trade settlement events. These events include interest claims arising out of failed cash payment, FX, and securities transactions and interest due on over-draft balances of cash or nostro accounts. In addition, system functionality will allow for handling securities market buy-ins, market fines, and also securities dividend and stock entitlements arising from corporate action events on failing and open stock loan and borrow transactions.
According to the International Securities Association for Institutional Trade Communications (ISITC) Europe, it is intended that the utility will become the industry standard procedure for settlement of claims disputes. Claimonitor Ltd. was created to own and run the new service, including handling the automated capture, distribution, tracking, matching, exception management, real-time reporting and helps facilitate the actual claims settlement. By automating processes and facilitating more STP functions in the post-trade, pre-settlement portion of the trade cycle, Claimonitor can increase efficiency and reduce costs and operational risk.
The service has already won the backing of such banks as HSBC and State Street Bank and Trust.
Stuart Mckinlay, Vice President at State Street Bank and Chairman of ISITC Europe, said, “We are excited with the industry adoption of the ISITC Interest Claims working party findings. This is a significant area of investigation for our technology sub-committee and we see a major role for ISITC Europe, in the first phase, to propagate innovation in the interests of market efficiency. In this respect, we are highly supportive of these initiatives. The parties involved clearly listened to our stated needs and addressed the issues we raised.”
“This area of our trade processing activity was previously manually intensive, prone to errors and wrought with time delays,” stated Richard Cato, senior manager for operations at HSBC. “With Claimonitor, we see a valuable new service to increase efficiency, reduce costs and remove an area of systemic risk in the way the operations currently work. We are pleased that Sun Microsystems, Metatomix and Claimonitor have collaborated to in hopes of making this new capability the new industry standard.”
Currently, settlement errors cost the market millions of dollars from interest and process expenses. In addition, claims are often handled manually and, without any audit trails or receipts, leave room for dispute. As a result, the cost of recovery can be higher than the claims themselves, so organizations don’t always pursue them. The new utility can eliminate the costly investigation, processing and storing of documents related to claims disputes.
About the Technology
Claimonitor is being developed on Sun’s x64 Sun Fire servers powered with the AMD Opteron (TM) processor, running on the Solaris 10 Operating Systems (OS) with the Sun Java Enterprise System and Sun Java System Identity Manager. The new service is fully hosted and run by Sun’s Managed Services Division, adding the strength of support vital for a utility of this significance.
The utility is built on Metatomix’s advanced ERI MTX platform, which includes sophisticated data management tools, rules engines and visualization to enable both the flexible deployment of new functions and the ability to view underlying data to support changing business requirements. In addition, Oracle Database 10g database is being used for historical transactions, which can be accessed through the Claimonitor information reporting tools.
“We are pleased to fully support the development and rollout of Claimonitor. The automation of the trade cycle is a key focus for Sun, and we will continue to play a proactive role in projects of this type, matching our innovation with the demands of the securities market,” said Donna Rubin, director of financial services, Sun Microsystems.
Nigel Matthews, capital markets manager for Oracle Corporation in the UK stated: “Claimonitor fills a missing element for automation in the STP Data Management space.”
About Claimonitor
For more information on Claimonitor, please visit http://www.claimonitor.com. In addition, Metatomix and Claimonitor will be joining Sun on the SUN Stand at the SIA Technology Management Conference, June 21-23, in New York City.
About ISITC Europe
ISITC Europe is a working committee of securities operations professionals representing custodian banks, investment managers, brokers, and vendors. The group’s mission is to foster alliances and advocate standards that promote straight through processing (STP) of securities transactions. The members of ISITC Europe actively participate in and influence industry-wide initiatives that promote direct electronic processing and information flow among all industry participants, throughout the entire trade life cycle.
About Sun Microsystems, Inc.
A singular vision — “The Network Is The Computer” — guides Sun in the development of technologies that power the world’s most important markets. Sun’s philosophy of sharing innovation and building communities is at the forefront of the next wave of computing: the Participation Age. Sun can be found in more than 100 countries and on the Web at http://sun.com
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