Barely half of market participants feel that their organization is ready for Straight-Through Processing according to a report released today from the Canadian Securities Administrators.

The findings are the result of an online survey of STP readiness carried out last May. Survey participants included investment counsel/portfolio managers, limited market dealers, investment dealers, mutual fund dealers and mutual funds.

Overall, the report shows that a slight majority (52%) of respondents feel that their organization is prepared or somewhat prepared for STP, while 34% feel that they are unprepared or somewhat unprepared and 15% don’t know.

However, the report also shows that the assessment by firms finding themselves prepared is not supported by the responses to many of the specific quantitative “progress” questions.

In fact, 55% of those organizations who feel prepared reported no STP-related spending in 2002. A significant number of firms also showed no expenditures planned for 2003 and 2004, which appears to be at odds with the degree of STP processing currently being reported.

“Achieving STP readiness industry-wide by mid 2005 is a lengthy and complex undertaking that requires that firms plan and budget activities several years in advance of the deadline,” said Stephen Sibold, chair of the CSA, in a news release.

“The apparent disconnect between firms’ self-assessments of their readiness and the actual level of preparations they have underway suggests that we need to take a closer look at industry’s state of readiness.”

The CSA will consult industry stakeholders to determine the reasons behind the gap between the perceived state of STP readiness and actual state of STP processing. As well, staff will conduct a separate survey with key infrastructure participants, including custodians, transfer agents, exchanges, clearing agencies and third party service providers. The results of the infrastructure survey should shed further light on the overall state of STP preparedness.

From the results of the survey, many functions were found to require manual processing and a significant percentage of institutional and retail transactions was found not to be fully automated..

“Industry’s commitment to STP is key for us to be able to seamlessly pass financial information electronically, on a system-to-system basis, to all parties in a transaction without manual handling or redundant processing,” added Sibold. “We encourage industry firms to continue to analyse their respective STP needs and to begin building the infrastructure they need to be able to seamlessly communicate with their industry peers.”

http://www.newswire.ca/releases/September2003/19/c2732.html