SYDNEY, Australia, Jan. 14, 2002 (PRIMEZONE) -- SFE Corporation Limited is entering into an extensive agreement with OM, a global leader in exchange, clearing and settlement technology, to outsource its core clearing technology and operational support functions to OM. The agreement represents a furthering of the existing relationship between SFE and OM and paves the way for a number of additional strategic initiatives on the part of both companies, with Sydney becoming a significant hub for OM in the Asia Pacific region. The total order value is US$28 million, including US$5 million in capital costs (license and project fees) and US$23 million in annual facilities management and software support fees over 8 years.
In addition to managing SFE's core clearing technology and operational support functions, OM will develop a new Central Securities Depository System (CSD) and next generation fixed-income clearing system on behalf of SFE to replace the existing FINTRACS system. The new system, called EXIGO CSD(tm), will be integrated with SECUR(tm), the OM clearing and settlement system that went live at SFE in December 2001. This will provide SFE with one common infrastructure for the clearing and settlement of all SFE-listed derivatives, and debt securities in Australia. It also gives rise to technology management efficiencies, service level improvements and additional functionality for SFE to extend its clearing capabilities to include equities and property settlement.
"The agreement with OM represents an opportunity for SFE to partner with a global leader in exchange, clearing and settlement technology," said Robert Elstone, CEO and MD of SFE Corporation Limited. "The creation of a contemporary applications suite, based on global standards and an open architecture, significantly enhances our ability to offer new products and services. At the same time it broadens SFE's scope for trading and clearing alliances with counterparts in the Asia Pacific region."
The terms of the agreement include:
-- The development of the new FINTRACS system replacement - EXIGO
CSD(tm)
-- OM to take over the operational support of the existing
FINTRACS system, until development of EXIGO CSD(tm) is completed
-- OM to then operate and support the EXIGO CSD(tm) system once
developed
-- OM to operate and support the SFE core derivatives clearing
system, SECUR(tm)
The agreement between SFE and OM will involve a transfer of approximately 30 SFE staff into the newly formed Australian OM development and Facilities Management team in the beginning of 2002.
"This agreement benefits SFE in several important ways," said Scott Ashhurst, Chief Information Officer at SFE. "Through the transfer of the SFE staff (most of whom were former Austraclear employees), OM will acquire the knowledge and expertise to develop a modern Central Securities Depository System, and then operate that system on behalf of SFE. This agreement will result in a cost-effective technology upgrade accompanied by a scaleable and integrated technology solution across the SFE group, allowing us to focus on business initiatives rather than software development."
The agreement also enhances OM's position as a leading technology provider in the Asia Pacific region with Sydney as its regional center for FMS operations. "We are very encouraged by the continued developments between OM and SFE," said Magnus Bocker, Chief Operating Officer at OM. "Through the acquisition of this knowledge base, and by leveraging SFE's expertise in OTC clearing and settlement, OM will deliver a fully integrated clearing technology solution to the Australian marketplace."
This fully integrated solution will include OM's clearing system SECUR(tm), and subsequently the securities settlement and depository system EXIGO CSD(tm). OM will also be able to launch its exchange trading and front and back office broker solutions on the Sydney platform. OM exchange users in the region include the Hong Kong Exchanges and Clearing Limited, Korean Futures Exchange and Australian Stock Exchange Limited, as well as the SFE. In addition, OneWorld settlement, OM's comprehensive settlement system, is currently being customized for the Australian marketplace with ABN-AMRO Australia.
"With the significant financial burden associated with upgrading exchange and clearing technology," continued Mr. Bocker, "we anticipate there will be further consolidation of systems, both within organizations and between them. The excellent business and cultural synergies between OM and SFE have enabled us to maximize this potential. We look forward to investigating this potential further as we expand our relationship with SFE and other exchanges in the region in the development of cross border trading and clearing services."
SFE Corporation Limited (SFE) is a publicly listed provider of exchange- traded and over-the-counter financial services for institutional investors globally. Fully electronic and with 24-hour trading capability, SFE offers trading products for investment and risk management and disseminates market data and information. SFE Clearing is the fully owned clearing and settlement arm of SFE Corporation Limited, and provides central counterparty clearing, central securities depository and cash settlement services. www.sfe.com.au
OM is the world's leading supplier of transaction technology to the financial services and energy industries, developing and marketing software that increases the efficiency of financial and commodity markets throughout the world. OM has over 100 customers in 20 countries worldwide. The Company also owns and operates exchanges and has operations in ten countries. OM is listed on Stockholmsborsen. For more information, please visit www.om.com.
This information was brought to you by Waymaker http://www.waymaker.net