Singapore Exchange (SGX)is deploying CheckFree TradeFlow in its SGX Prime service for post-trade processing of securities at the exchange's central depository.
In May 2006, SGX announced its plans to launch SGX Prime by the end of the year, and subsequently went looking for a technology partner to help deliver the service. With CheckFree on board, SGX Prime is now expected to go live at the end of the first quarter of 2007 and provide an "open access gateway" to the depository along with central pre-settlement matching.
Terry Gibson, head of STP-enabled services operations group, SGX, says CheckFree’s software was selected because it was a proven post-trade processing hub already being used in the asset servicing environment. And although it hadn’t been deployed by a stock exchange before, CheckFree TradeFlow’s core matching engine fit the needs of SGX, and the system is flexible enough to incorporate the exchange’s business logic and local market practices.
SGX Prime allows for financial transaction management across a broad range of instruments and product segments. The integration of CheckFree TradeFlow into SGX Prime will allow brokers, depository agents and other market participants to engage in post-trade services, with a choice of connectivity options for clearing and depository systems, including ISO 15022 messaging standards.
Market participants can connect direct through to SGX Prime to input their settlement instructions for matching prior to settlement in the Singapore Exchange Central Depository. Gibson says he expects this will be done over existing leased-lines, but if there is demand they could also take instructions over the Swift network.
He adds that further functionality is likely to be added to the central matching available over SGX Prime’s open access gateway. This could include corporate actions and funds processing, and potentially be expanded to cover regional markets beyond Singapore.
SGX is currently working with market participants to develop a code of best practice that by the end of the year will confirm industry agreement on aspects of the service such as timeliness and format of instructions. The exchange will then begin a period of industry training ahead of the service launch.