New Cognotec Custody Solution Offers Automated
FX and Securities Integration

9th October 2006, Sydney; Cognotec, the global provider of leading-edge foreign exchange trading solutions to the financial services community, has announced a new automated custody solution for fully automating the foreign exchange component of securities transactions. The Cognotec Foreign Exchange Custody Service (FXCS), is set to greatly enhance the quality of a banks' custody services by significantly improving STP capabilities in this area. It also enables a custody provider to benefit from automatic netting of buy and sell foreign exchange transactions in the same currencies.

Cognotec FXCS allows automatic processing of foreign exchange trades arising from securities transactions. The foreign exchange transactions resulting from securities bought and sold in non-base currencies can be netted, aggregated for bulk trade and routed to single or multiple liquidity providers for market execution. Executed bulk trades can then be re-allocated back to client accounts at the appropriate side of the spread with the ability to apply client-specific spreads as required.

The Cognotec FXCS solution is designed for ease of integration between multiple custody systems and liquidity providers with the ability to route different foreign exchange trades to different liquidity providers according to different criteria, for example client, currency or value date. Then bulked up market trades can be triggered for automatic execution according to several configurable criteria, while the bank also retains full control with the ability to manually execute market trades, as required. Once executed, the system provides the ability to allocate market trades back to the custody system, at the appropriate side of the market spread. The system provides the ability to apply client-specific spreads, as required. Further, as Cognotec FXCS supports feeds from multiple custody systems, in addition to securities transactions it can be linked to a range of different transaction types including dividend payments and other corporate actions.

Announcing the launch, Kieran Fitzpatrick, Head of Strategic Solutions for Cognotec, commented: "Increasingly, true trading efficiencies are to be found by integrating previously discrete systems with smart leading-edge technology. The FXCS solution provides an intelligent means for automating links between custody foreign exchange requirements and foreign exchange liquidity providers, allowing for netting and re-allocation of transactions.

The configurable nature of the system allows the financial institution as much or as little manual control as it desires while making true straight-through-processing an achievable goal. Cognotec FXCS is an important and unique contribution to this end."