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Accenture, Compaq, Microsoft, Advent Software and the Bank of New York have teamed up and created Encompys. The firm will offer a portal-based end-to-end STP outsourcing solution to asset managers as they prepare to move from three-day trade settlement (T+3) to one-day (T+1) trade settlement.
According to Michael Lane, chief marketing officer at Encompys, outsourcing offers companies an opportunity to comply with new settlement standards without heavy capital expenditure.
"The US securities industry believes that it is going to cost US business $8bn (£5.6bn) to get to T+1," said Lane. "Asset managers have just spent a lot of money on Y2K. Here comes another major industry spend that is not really helping them or the way they do business. It's another non-revenue spend."
Lane said that when the securities market moved from five-day trade settlement to three-day settlement in 1995, the infrastructure to support transactions was hardly altered. Now that infrastructure is finding it difficult to cope with the volume of transactions resulting from the e-business boom.
Encompys believes it will be able to offer asset managers a single point of entry for all pre-trade, trade and post-trade activities.
Advent will build the core applications and Microsoft will supply the portal applications and system software. Compaq will provide the hardware, Accenture will offer consulting services and the Bank of New York will deliver the trade execution and securities servicing.
Encompys has already signed up international fund manager PIMCO as its first customer.