Securities Industry Association Applauds SEC's Concept Release To Improve Safety, Operational Efficiency Of Trade Transaction Process - Industrywide Efforts Underway To Move To Straight-Through Processing

The Securities Industry Association today lauded the Securities and Exchange Commission for issuing a "concept release" on methods to improve the safety and operational efficiency of the trade transaction process from initial order through clearance and settlement.

"We commend the SEC for seeking comment on this important industry initiative to streamline the pipeline used for handling securities transactions," said John Panchery, SIA's vice president and managing director, systems and technology. "The industry has been working for the past four years on initiatives critical to achieving straight-through-processing. In this effort, the SEC's role is key in implementing regulations to ensure standardization in the processing of trades. SIA's STP Committee will review the proposal and plans to file a comment letter. We look forward to working with the commission to realize a more efficient process for transactions."

The SEC concept release is available at: http://www.sec.gov/rules/concept/33-8398.htm.

Panchery said that SIA formed a STP committee in 1999, and since then has cleared several key milestones. The achievements in 2003 included:

• Institutional trade processing and matching utility user requirements (establish baseline expectations for U.S. matching providers);
• A "code of practice" also was created to outline the benefits of matched affirmed confirmations and conformance guidelines;
• The Automatic Recall Management System (ARMS) went "live," automating a former manually intensive telephone and fax process for securities lending recalls;
• Corporate actions saw gains in the development of liability notification hub business requirements and the standardization of data for corporate actions announcements (i.e., stock splits, voting materials, etc); and,
• Development of a "how to" guide for industry professionals, and a "toolkit" to educate retail clients on the benefits of eliminating the use of stock certificates.

In 2004 SIA has undertaken an overall project assessment and identified several areas of focus, building on the momentum of 2003 accomplishments. These include: central matching for institutional trades; the automation of corporate actions announcements and liability notices; the dematerialization of physical certificates; continuing educational campaign on the use of the Automated Clearing House for payments; and, the adoption of industry standards. In addition, at SIA's Operations Conference from May 4-7, 2004 (www.sia.com/ops2004/), SIA plans to announce the direction of the STP program as well as the industry's technology/operations priorities through 2010.

More information about SIA's efforts is available at: www.sia.com/stp/.