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Achieving STP Today

Straight through processing is astrategic imperative today and isre q u i red by all financial institutionsin order to achieve operating eff i-

ciencies, and reduce costs and operationalrisk. STP can be achieved today w i t h i n a ninstitution by integrating its hetero g e n e o u ssystems environment in the front and backo ffice. STP can also be achieved todayb e t w e e n institutions by seamlessly connect-ing the systems on the buy-side with sys-tems on the sell-side and with settlementa g e n t s .

With a single SunGard relationship, clientscan fully automate the entire transaction life-cycle for diff e rent asset classes, cross bord e r,with all of their existing business partners,and also integrate seamlessly with their exist-ing applications. More than 1,500 firms par-ticipate in <STN > today.

The SunGard Transaction Network <STN>connects diff e rent parties in the financial mar-ketplace to achieve straight-through pro c e s s-ing. <STN> consists of a growing number ofhubs, each focusing on a specific market seg-ment, connecting SunGard with SunGard andt h i rd party solutions. The SunGard Tr a n s a c-tion Network helps clients achieve opera-tional efficiency and operational re s i l i e n c e .I m p roving operational efficiency in today’smarkets re q u i res a focus on STP. SunGardhelps clients realize STP through internal andexternal integration. We link our best-of-b reed solutions in the buy-side and sell-side.Combined with seamless connectivity to part-ners and counterparties, SunGard offers ac o m p rehensive, end-to-end STP solution tovirtually any market participant.

The most costly part of a trade is the costof intermediating the trade. The PlexusG roup estimates that an average of 100-200basis points may be lost through ineff i c i e n-cies in the trading process. “A significant

number of today’s trades involve manualp rocesses for at least some phase of thetransaction,” explains Mark Vo l k e r, seniorvice president for business development atS u n G a rd Financial Networks. “Even though adecision on T+1 was postponed until 2004,firms can gain immediate benefits with STPsolutions that are available today, and thatcan improve throughput, capacity, and accu-r a c y. ”

Key components of <STN> include:

<STN> EQUITIES connects equity investorswith brokers, market makers, ECNs, andother liquidity pools. It links systems in assetmanagers and trust companies with ord e rmanagement systems on the sell-side. Bybeginning trade automation at trade incep-tion, it also positions the originating managerfor use of <STN> Post Trade Services, to com-plete the post-execution trade process.

<STN> FUNDS connects investors with mutual fund families—linking systems inemployee benefit administrators, asset man-agers and trust companies with systems ofmutual fund families and transfer- a g e n t s .

<STN> FIXED INCOME is a real-time, secureand efficient trading platform that supportsthe collection, management, display andexecution of fixed income security offerings.

<STN> MONEY MARKETS o ffers easy-to-useInternet trading for a range of money marketp roducts including commercial paper. Bylinking buyers with primary dealers andissuers, efficiency is brought to this other-wise manual enviro n m e n t .

<STN> POST TRADE SERVICES s t re a m l i n e spost-execution trade operations with assetmanagers, broker/dealers, custodians andclearing agencies. <STN> Post Tr a d e

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Services automates the trade matching anda ffirmation process, offers seamless path-ways for trade allocations and provides fullintegration of bank letters and bank notifica-tions. Further, early adoption of these tech-nologies positions market participantss q u a rely in the fore f ront of trade automation,p reparing them now for the move to virtualmatching utilities and shorter settlementcycles.

CASE STUDIES

N a v e l l i e r, a quantitative/fundamental analy-sis and fund firm based in Reno, NV, uses<STN> Post Trade Services to automate theconfirmation and trade affirmation pro c e s s-es, as well as trade allocations for its spon-s o red WRAP program management.Navellier was able to reduce its 19-hourtrade matching and affirmation process, toonly 2 hours with <STN> Post Trade Services.Employees no longer work late hours and areable to process information automatically viaadvanced scripting. SunGard was also ableto significantly reduce Navellier’s trade-con-firm download time from a nearly day-longp rocess to only 2.5 minutes. In addition,<STN> automated Navellier’s WRAP pro-g r a m ’s trade allocation process, which pre v i-ously included 20-30 page faxes of detailedallocation data. Navellier and SunGardworked cooperatively to automate thep rocess of communicating block-trade allo-cation instructions that spanned hundreds ofindividual accounts.

Wasatch Advisors specializes in managingassets for institutional and individual clients

t h rough investments in small and mid-sizecompanies. After implementing <STN>Equities for order routing from its FIX-enabled order management system, Wa s a t c hwas able to quadruple trading volume withno increase in trading staff. Enabling auto-mated trade-order routing allowed its tradersto devote more time and energy to genera-tion and execution of actual trades.

CMC Interactive, LLC, a Manhattan-based401(k) service plan provider targeting thesmall to mid-size markets, was able to cutout the middleman, automate the 401(k)fund-trading process, reduce costs and signon new clients with <STN> technology.“ S u n G a rd ’s systems allow our plan sponsorsto get information, download reports andrun live reports. It saves us time, money andultimately gives cost savings to our cus-tomers,” explains Michael Calandra,Principal, CMC Interactive, LLC.

The seamless link between SunGard ’sRelius™ Administration (re c o rdkeeping soft-w a re) and <STN> enables CMC Interactive toautomate trading on an omnibus level. Plansponsors and participants have direct accessto their accounts maintained on Reliust h rough the Web and Voice Response Unit(VRU).

“ We put all our eggs in the SunGard basket.S u n G a rd listens to our needs in order to takethe product to a higher standard,” explainsM r. Calandra.

“ S u n G a rd's strategy is to be the most eff i-cient processor of transaction flows betweenthe buy-side and sell-side with the fastestand most cost-effective technology infra-s t r u c t u re,” explains Mr. Vo l k e r. “The SunGardTransaction Network recently signed up its500th client for equities trading and is nowalso the third largest mutual fund tradingnetwork in North America. That is STP. Thatis SunGard today. ”

w w w. s u n g a rd . c o m

SunGard55 BroadwayNew York, NY 10006Phone: (212)809.3078Karen GenicolaE-mail:karen.genicola@sungard.comURL: www.sungard.com