Goldman Sachs has joined with Treasury management specialist Trema to enable automatic updating of trading positions in FX spot, forward and options in real time.
The partners have developed a real time link between Goldman’s proprietary online WebET FX platform and Trema’s treasury, risk and asset management system Finance Kit via the company’s Web server Transaction Hub.
For those FX customers of Goldman Sachs that use Trema’s systems, it means that when a deal is executed on WebET, the customer’s position will be automatically directed via Transaction Hub into Finance Kit – a process that previously had to be done on a manual basis. The partners say this level of real time automation will cut operational risk, reduce the need for multiple systems and enable customers to focus on trading strategy rather than administrative tasks.
So far, the system is only up and running at Ericsson Treasury, but Torbjorn Lindstrom, business manager, trading and risk management at Trema, says that of Finance Kit’s approximately eighty installations, two more will be live before the end of the year and many more will be operational from Q1 2001. “All we need to do to get our customers live is to install a small piece of software that is responsible for the XML messaging,” says Lindstrom.
Trema is also one of the technology partners announced last month by the 14 strong FXAll – the multi-bank FX consortium that includes Goldman Sachs, JP Morgan, Bank of America, Credit Suisse First Boston, Morgan Stanley Dean Witter, UBS Warburg, Bank of New York and HSBC. Trema will connect to the FXAll platform in the same way as with Goldman’s proprietary offering.
Lindstrom says Trema is also in discussions with other banks and multi-bank initiatives to develop similar links. Although Lindstrom cannot confirm if Trema is negotiating with Atriax, the rival FX platform launched by Chase Manhattan, Deutsche Bank and Citibank, and including 63 other FX providers, he says he “will not exclude any potential partners”.
For the moment, Lindstrom says the service is limited to customers using Trema’s Finance Kit, however, in the long term, he says the company will offer Transaction Hub as a stand alone product to link with other firms’ treasury management products.
The company also plans to add more services. “For example, we are looking at pre-trade integration, where users could combine transactions directly with the treasury system and, in the post-trade area, we are considering how to offer online confirms,” says Lindstrom.