STP e-commerce race hits top gear
The highlycompetitive race to become the pre-eminent provider of straight-through processing (STP) services to the Australian managed fund market came to a head last week, with a number of contenders choosing to play their respective cards.
And while the motivation for the increased activity in the sector could be seen to be the Investment and Financial Services Association’s (IFSA) MFundEC project — aimed at establishing an industry standard in the electronic transfer of information within the funds management industry — the truth of the matter is that e-commerce product developers are moving much faster than the industry standard can be established.
The four main players in this space — InvestmentLink, Ausmaq, the Australian Stock Exchange (ASX) and IWL — all agree that MFundEC is no longer the driving force behind the momentum in the e-commerce space.
“We are not yet convinced that the market wants what MFundEC wants to do,” ASX Clearing and Settlement executive general manager Chris Hamilton says.
InvestmentLink chief executive and committee member of the MFundEC project Peter Philip says one of the reasons the project is not leading the way is because it is all about establishing a standard data format which is only “five per cent of the entire problem”.
The recent activity in this sector was headlined last week with the announcement of the alliance formed between the ASX and IWL to provide an STP service for the unlisted managed fund and superannuation industries.
The alliance will enable the ASX to use IWL’s FundLink software as the core technology for its ASX FundConnect, the unlisted managed funds transaction-processing service planned to be released early next year.
Meanwhile, InvestmentLink, one day after the ASX/IWL announcement, launched its transaction processing service for retail managed funds. Known as e-Portfolio Transaction Service, it will enable financial advisers and dealer groups to conduct a range of equity and fund purchases, investments applications and redemptions, electronically.
According to Philip, the ASX/IWL alliance does not change the state of play between the contenders.
“They are still a long way off having a product and it’s a very complex project. And six to nine months is a very aggressive time schedule,” he says.
Philip says the fact that InvestmentLink is a year ahead of those who “aspire to be competitors”, puts them in a very strong market position, with mass take-up now being the key.
This frenzy of activity has left the final contender Ausmaq, out in the cold, and for good reason according to Ausmaq general manager business development Chris Donohue.
He says while other organisations are looking to be the first to market with an STP product for the retail financial services industry, Ausmaq is targeting the wholesale side.
Currently building its capability with Microsoft, and to be trademarked as Main Hub, the first user of its capability is expected to be announced by the end of July.
Recommended for you
There is a gap in the market for Australian advisers to help individuals with succession planning as the country has been noted by Capital Group for being overly “hands off” around inheritances.
ASIC has cancelled the AFSL of an advice firm associated with Shield and First Guardian collapses, and permanently banned its responsible manager.
Having peaked at more than 40 per cent growth since the first M&A bid, Insignia Financial shares have returned to earth six months later as the company awaits a final decision from CC Capital.
Private market secondaries manager Coller Capital has unveiled a new education platform to improve advisers’ and investors’ understanding of secondaries.
