If you have an in house trade processing guru, the Canadian Capital Markets Association wants to hear from them. At the moment there is no universal set of best practices or “bible” for straight through processing (STP), and working groups for retail trading want suggestions.

The deadline for comment on the addendum to the April 2002 Retail Trade Processing White Paper, released in September, has been extended from the end of October until November 10.

At a breakfast meeting today, Jerry Beniuk, Toronto-based VP and managing director of TD Bank Financial Group, and chair of the CCMA Retail Trade Processing Working Group outlined for industry members the various milestones on the road to pursuing STP from the time a client initiates a transaction to settlement.

He says regulators like the Canadian Securities Administrators are committed to making STP a priority so that the industry meets the standards and best practices by the June 2005 deadline.

Under current business models Beniuk says impediments to STP include a continued reliance on the receipt of documentation, manual orders and physical cheques required for transaction settlement.

Recommendations put forth include the implementation of documentation agreements between industry parties. Such agreements would see different players such as dealers and fund companies agree to collect and keep client information in one place. “It was the number one recommendation,” he says. “To reduce paper and the need to move paper.” Using a phased in approach, such agreements could eliminate between 50-75% of the paper fund companies currently receive.

The second recommendation is for the industry to embrace electronic order entry and electronic settlement to eliminate practices such as time stamping, order queuing and using the courier to move cheques between companies. “Ways of processing orders varied by company, but they all involved time, people and money.”

FundSERV is one of the systems being promoted. Although he is admittedly a member of the FundSERV board of directors, Beniuk says “right now this is the one we’re supporting because it seems they have the greatest participation rate in the industry.” He says between 60 and 80% of the industry currently uses FundSERV. Going forward the company will be working to make error codes more useful, increase usership and encourage real time processing rather than manual or batch order entry.

Overall, the addendum “further analyzes and makes recommendations regarding ways to increase efficiency, minimize risks, reduce trade processing costs and improve customer service through straight-through processing (STP).”

The committee is specifically seeking comment on money movement alternatives, electronic standards, fund accounting, and non-fund products such as bonds and GICs, as well as legal and regulatory issues and the roles and responsibilities of industry participants for potential best practices and standards.

So far the group says there are no foreseeable issues related to fund accounting that could hinder STP efforts. For money movement alternatives the group says the use of physical cheques in the retail product process must be greatly reduced with the long term goal of elimination.

Anybody with any suggestions, thoughts or comments on any part of the process are strongly encouraged to comment. The paper can be found on the CCMA website at www.ccma-acmc.ca. Issues can be addressed to any committee member or by contacting info@ccma-acmc.ca.