Straight-through processing (STP) is important for financial institutions to improve efficiency and reduce costs and risks. The document discusses SunGard's Transaction Network (STN), which connects different financial parties to achieve STP for various asset classes. STN allows full automation of the transaction lifecycle across borders and integrates with existing applications. The document provides examples of how STN has helped firms like Navellier, Wasatch Advisors, and CMC Interactive automate processes to reduce costs and improve efficiency.

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Achieving STP Today
S
traight through processing is a
strategic imperative today and is
required by all financial institutions
in order to achieve operating effi-
ciencies, and reduce costs and operational
risk. STP can be achieved today within an
institution by integrating its heterogeneous
systems environment in the front and back
office. STP can also be achieved today
between institutions by seamlessly connect-
ing the systems on the buy-side with sys-
tems on the sell-side and with settlement
agents.
With a single SunGard relationship, clients
can fully automate the entire transaction life-
cycle for different asset classes, cross border,
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 different parties in the financial mar-
ketplace to achieve straight-through process-
ing. <STN> consists of a growing number of
hubs, each focusing on a specific market seg-
ment, connecting SunGard with SunGard and
third party solutions. The SunGard Transac-
tion Network helps clients achieve opera-
tional efficiency and operational resilience.
Improving operational efficiency in today’s
markets requires a focus on STP. SunGard
helps clients realize STP through internal and
external integration. We link our best-of-
breed solutions in the buy-side and sell-side.
Combined with seamless connectivity to part-
ners and counterparties, SunGard offers a
comprehensive, end-to-end STP solution to
virtually any market participant.
The most costly part of a trade is the cost
of intermediating the trade. The Plexus
Group estimates that an average of 100-200
basis points may be lost through inefficien-
cies in the trading process. “A significant
number of today’s trades involve manual
processes for at least some phase of the
transaction,” explains Mark Volker, senior
vice president for business development at
SunGard Financial Networks. “Even though a
decision on T+1 was postponed until 2004,
firms can gain immediate benefits with STP
solutions that are available today, and that
can improve throughput, capacity, and accu-
racy.”
Key components of <STN> include:
<STN> EQUITIES connects equity investors
with brokers, market makers, ECNs, and
other liquidity pools. It links systems in asset
managers and trust companies with order
management systems on the sell-side. By
beginning trade automation at trade incep-
tion, it also positions the originating manager
for use of <STN> Post Trade Services, to com-
plete the post-execution trade process.
<STN> FUNDS connects investors with
mutual fund families—linking systems in
employee benefit administrators, asset man-
agers and trust companies with systems of
mutual fund families and transfer-agents.
<STN> FIXED INCOME is a real-time, secure
and efficient trading platform that supports
the collection, management, display and
execution of fixed income security offerings.
<STN> MONEY MARKETS offers easy-to-use
Internet trading for a range of money market
products including commercial paper. By
linking buyers with primary dealers and
issuers, efficiency is brought to this other-
wise manual environment.
<STN> POST TRADE SERVICES streamlines
post-execution trade operations with asset
managers, broker/dealers, custodians and
clearing agencies. <STN> Post Trade

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Services automates the trade matching and
affirmation process, offers seamless path-
ways for trade allocations and provides full
integration of bank letters and bank notifica-
tions. Further, early adoption of these tech-
nologies positions market participants
squarely in the forefront of trade automation,
preparing them now for the move to virtual
matching utilities and shorter settlement
cycles.
CASE STUDIES
Navellier, a quantitative/fundamental analy-
sis and fund firm based in Reno, NV, uses
<STN> Post Trade Services to automate the
confirmation and trade affirmation process-
es, as well as trade allocations for its spon-
sored WRAP program management.
Navellier was able to reduce its 19-hour
trade matching and affirmation process, to
only 2 hours with <STN> Post Trade Services.
Employees no longer work late hours and are
able to process information automatically via
advanced scripting. SunGard was also able
to significantly reduce Navellier’s trade-con-
firm download time from a nearly day-long
process to only 2.5 minutes. In addition,
<STN> automated Navellier’s WRAP pro-
gram’s trade allocation process, which previ-
ously included 20-30 page faxes of detailed
allocation data. Navellier and SunGard
worked cooperatively to automate the
process of communicating block-trade allo-
cation instructions that spanned hundreds of
individual accounts.
Wasatch Advisors specializes in managing
assets for institutional and individual clients
through investments in small and mid-size
companies. After implementing <STN>
Equities for order routing from its FIX-
enabled order management system, Wasatch
was able to quadruple trading volume with
no increase in trading staff. Enabling auto-
mated trade-order routing allowed its traders
to devote more time and energy to genera-
tion and execution of actual trades.
CMC Interactive, LLC, a Manhattan-based
401(k) service plan provider targeting the
small to mid-size markets, was able to cut
out the middleman, automate the 401(k)
fund-trading process, reduce costs and sign
on new clients with <STN> technology.
“SunGard’s systems allow our plan sponsors
to get information, download reports and
run live reports. It saves us time, money and
ultimately gives cost savings to our cus-
tomers,” explains Michael Calandra,
Principal, CMC Interactive, LLC.
The seamless link between SunGard’s
Relius™ Administration (recordkeeping soft-
ware) and <STN> enables CMC Interactive to
automate trading on an omnibus level. Plan
sponsors and participants have direct access
to their accounts maintained on Relius
through the Web and Voice Response Unit
(VRU).
“We put all our eggs in the SunGard basket.
SunGard listens to our needs in order to take
the product to a higher standard,” explains
Mr. Calandra.
“SunGard's strategy is to be the most effi-
cient processor of transaction flows between
the buy-side and sell-side with the fastest
and most cost-effective technology infra-
structure,” explains Mr. Volker. “The SunGard
Transaction Network recently signed up its
500th client for equities trading and is now
also the third largest mutual fund trading
network in North America. That is STP. That
is SunGard today.”
www.sungard.com
SunGard
55 Broadway
New York, NY 10006
Phone: (212)809.3078
Karen Genicola
E-mail:
karen.genicola@sungard.com
URL: www.sungard.com