ADP will provide single stock futures functionality to clients within their core BPS solution at no incremental cost, as part of their continued commitment to providing a comprehensive transaction processing solution.
Using their current Brokerage Processing Services (BPS) back-office processing solution, ADP clients can now offer their customers the ability to process these new instruments, which combine the features of an equity and future instrument. ADP's clients' customers will be able to hold these instruments in their equity accounts allowing them to leverage single stock futures from both a margin and buying power perspective. From an operational perspective, BPS integrates the processing of this new hybrid instrument in its current operational processes/functions, allowing clients to leverage their existing brokerage operations resources and processes.
Single stock futures are futures on individual stocks and narrow-based indices. A single stock futures contract is a legally binding agreement between two parties to purchase or sell in the future, a specific quantity of shares of a single stock or narrow-based index. If held until maturity, the buyer will pay the current value of the shares and receive the underlying equity. Currently, one single stock future contract is equal to 100 shares of the underlying security; the settlement date for this instrument is T+1.
The product is currently being beta tested by several clients. The product will go into production this month.
