HedgeWorld Daily News. Technologically Speaking April 8, 2003 11:41:06 AM ET

Forex Back Office Gains Automation

By Paul Barr, Senior Reporter

NEW YORK (HedgeWorld.com)—Three foreign exchange prime brokers teamed up to use software that will automate the cumbersome task of assigning client trades to the proper forex bank.

J.P. Morgan Chase & Co., Deutsche Bank and AIG Trading Group Inc., Greenwich, Conn., helped design and will use a forex trade give-up system offered by Traiana Inc. The system, called Traiana Harmony, allows participating banks to electronically bring together the proper parties after prime brokerage clients place foreign exchange trades.

When a hedge fund manager places a currency trade with a bank, the process of getting the trade done through the fund manager’s prime broker is called a give-up trade. The foreign exchange give-up is tough to automate, unlike similar processes for exchange-traded securities, said Nicholas Solinger, vice president of marketing for Traiana. “There’s a lot of paper going back and forth between banks to do these give-up trades,” he said.

Traiana Harmony can automate the give-up process, provided all of the involved parties are online with the system. Having three large prime brokers participating from the start, though, means a healthy amount of hedge fund forex trades could end up on the system. Executing brokers who give up trades to J.P. Morgan, Deutsche, or AIG, and want to sign on can register to receive information www.traiana.com/harmony. The three prime brokers themselves expect to be fully integrated with the software some time in the second half of this year.

Mr. Solinger noted that the creation of Harmony was client-driven. “We were approached by the three firms to build the utility,” he said. He said the system could give them a leg up on the competition in providing greater automation for clients.

Traiana also offers the ARCH system, which automates the entire back office of a prime broker. Deutsche Bank’s prime brokerage signed on to use ARCH about a year ago, achieving at that time straight-through processing for 95% of its customer trades HedgeWorld Online

Find this article at: HedgeWorld Online

Contact Us

Press and Media contact

Forex Back Office Gains Automation