Australian super funds move to automate funds processing
Jun 07, 2012
Sydney – Australia’s $1.3 trillion superannuation and managed investments sector is taking a long-awaited step towards automating its complex funds processes with J.P. Morgan’s launch of a totally automated fund routing and settlement service. The new service meets the growing demand for greater efficiency in placing and tracking transactions, resulting from a significant increase in the number of global asset classes and investment vehicles available to large investors.
This initiative aims to bring Australia and New Zealand more into line with other developed markets where the majority of processing for unlisted unit trusts and hedge funds is automated. Despite the relative sophistication of Australia’s institutional investment sector, more than 80% of transactions for unlisted unit trusts and hedge funds in Australia are carried out manually by fax, telephone or spreadsheet¹ – processes which are labour-intensive, slow and subject to human error.
The new J.P. Morgan platform, called the Fund Order Routing and Settlement Service (FORSS), allows large institutional investors such as super funds to deal with multiple counterparties via a single, automated online channel for all unlisted unit trust and hedge fund orders – removing the need for the client to communicate multiple times during the order lifecycle.
The service is electronically enabled for both inbound and outbound movements, and can integrate directly with counterparties in the market via industry messaging networks such as SWIFT.
The tool is already in use by more than one hundred J.P. Morgan clients in Europe and the US, and is part of the ongoing build-out of J.P. Morgan’s global technology platform for Australian and New Zealand clients.
J.P. Morgan WSS managing director David Braga said the FORSS capability eliminates many of the risks associated with fax or other manual forms of order placement.
“With FORSS, the client simply places an order via the secure online interface of J.P. Morgan ACCESSSM or with an electronic message such as SWIFT. The new platform substantially reduces error risk for the client and speeds up the whole process, enabling clients to easily access the data online and in real time.”
“After the full implementation of FORSS is complete, clients will be able to choose their own – or select from the universe of existing global and domestic unlisted unit trust and hedge funds available to J.P. Morgan (currently over 70,000) – therefore reducing time to market for new relationships,” he said.
Several leading Australian super funds have already signed up to the platform with consistently positive feedback. Specifically, clients have commented on the user-friendly interface and simplicity of the instruction creation and submission process.
“It puts the client in control of their fund order processing. The workflow, order automation and integrated reporting gives our clients full transparency of their fund assets from order placement through to settlement,” Mr. Braga concluded.
1 Financial Services Research Q4 2010, Kevin Lee, CEO of Calastone