OM and Sanford have already commenced technical evaluation and due diligence to investigate the viability of the agreement. Subject to the outcome of these processes, OM and Sanford will pursue a range of other business opportunities beyond the establishment of the Australia based TPC service. These opportunities include joint marketing and distribution agreements and in particular, the marketing by OM of Sanfords proprietary Plato II™ technology internationally. The OM/Sanford agreement also encompasses an option for OM to acquire an equity stake in Sanford. Under the agreement OM has an option to acquire 15 per cent of Sanford through the issue of 7,785,000 shares at 35c. Upon exercise of the option OM will become Sanfords second largest shareholder after the National Australia Bank.
As Sanford's CEO Mr Steven Goh observes "The fit between Sanford and OM is very apparent and provides a distinct pathway to the commercialisation of Sanfords proprietary Plato II™ application. Plato II™ provides an end-to-end web based order, settlement, clearing and allocation transaction system established for the Australian market and has the potential to be a world class solution. The system is CHESS accredited and is already up and running in Australia, providing equities settlement functionality to a number of brokers and 43,000 retail customers. OM's FINESS™ product covers the remaining instrument classes. In addition, OMs expertise in building and delivering exchange and transaction systems around the world, provides the perfect platform for the commercialisation of Sanfords Plato II™ technology."
Peter Ferguson, General Manager for OM in Australia continues: "OM has serviced Scandinavian banks, asset managers and brokers with back office services on the FINESS™ platform for almost a decade, with customers including UBS Warburg and HSBC. The expansion of this business into Aus-tralia is a natural extension of OM's core competence. There are a number of elements which set this solution apart from other local offerings. Firstly, we will offer a service across all instrument classes. Secondly, the technology is already tested. In addition, OM is already in this market in Scandinavia, so we have both the business and the technical competence." Mr Ferguson said.
Mr Ferguson continues: "One of the major problems faced by earlier attempts to establish TPC solu-tions in this market has been exchange connectivity. In this case, Plato II™ already has CHESS ac-creditation and FINESS™ already interfaces with OM's SECUR™ clearing system, the system we operate locally on behalf of SFE Corporation (SFE). In other words, a lot of the hard work in con-necting to the local exchanges has already been done."
The ability to provide a full TPC service in Australia will be facilitated by OM's expanded presence in Sydney. OM first established a presence in Australia in 1996 when it delivered the CLICK™ Exchange System to the Australian Stock Exchange (ASX). The ASX uses CLICK™ for its options and futures Page 2 trading platform. In a significant move to expand its Asia Pacific business, OM recently signed an extensive facility management services and systems development agreement with SFE making Syd-ney a significant hub for OM in the Asia Pacific region.
"This transaction is a significant endorsement of Sanford's technology by a world leader in the field and the most tangible impact is that for the first time Australian brokers will be able to provide their clients with a wrap-type service for international markets. The relationship will give Sanford's proprietary solutions international exposure and should lead to enhanced international interest in the Australian markets. We are proud and excited to have established this relationship with OM and I am confident it will deliver benefits for all parties," Mr Goh said.
OM is a world 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 and employs more than 1,600 people in 17 offices in 10 countries. The Company also owns and operates exchanges in Scandinavia, the UK and Canada. OM is listed on Stockholmsbörsen. For more information, please visit www.om.com.
