State Street Bank and Trust has launched Fund Connect, the latest addition to its Global Link portal. Fund Connect is an online trading tool that provides access to a wide range of proprietary and third party money market and investment funds.
FX Connect, which was launched in August 1996, was the first asset class to go live over the Global Link platform. During 1999, FX Connect saw 250,000 trades totalling $82 billion worth of transactions, according to Stephen Smit, recently appointed managing director for Global Link, Europe, and is on target to reach 1.5 million transactions this year with a proportionate rise in dollar volume.
“FX Connect has driven the whole product suite. We started with FX Connect, because FX is a by-product of global investing and has traditionally been State Street’s strength,” says Smit. “Our clients required that we enhance their operational efficiency and cut out any margin for error, which is why we built this transaction capability.”
Global Link is an open transaction portal designed for global institutional investors, that provides pre-trade research and analysis, multi-asset trading and post-trade clearing and confirmation in real time. The idea behind the open portal is so State Street’s investors can eventually access a range of “best of breed” providers from around the world.
While Global Link is browser-based, it operates via a private network operated by Savvis, originally built in partnership with Bridge Information Systems. “We are Internet ready, but are still content delivering this over a private network,” says Smit. “Security is an issue, but performance is more important when it comes to our clientbase, so by using a private network, we have achieved a level of guaranteed delivery.”
Global Link currently has 245 asset management firms using the service in 19 countries. Within the pre-trade component, clients can access State Street’s research and charting services, as well as have two-way conversations with the bank’s traders in six centres. Global Link also has an extensive set of portfolio flow indicators for the developed markets that show investors where the inflows and outflows are occurring globally.
The post-trade component means users can eliminate manually re-keying trade details, because Global Link provides straight-through processing to clients’ own order management systems. Global Treasury Support Services enables clients to view outstanding trades and position reports online within 20 minutes of trade completion.
Through Fund Connect, investors can access a variety of funds and Smit says that in six to eight weeks, he hopes to expand the family of funds from money markets to country index and sector funds.
“Fund Connect covers the entire investment cycle – from pre-trade, trade to post-trade – we want to offer our customers tools that assist in idea generation, portfolio and risk management, through to trade execution and confirmation services,” says Andrew Johnston, vice president.
“Fund Connect will dramatically change the way that institutional investors access the funds marketplace. What we are essentially doing is connecting clients with clients, which is where this is heading. Technology is allowing intermediaries to be disintermediated, so we see our role as adding value to the relationship,” says Smit, adding that the bank is developing a Swift messaging capability, which will automatically send post-trade details to the client’s own custodian.
State Street is currently planning to roll out two additional services, Equity Connect by Q3, and a fixed income product by year-end.