In a year full of doom and gloom it’s difficult to find much good to write about but the continued success of EMXCo is a real ray of sunshine in an industry just loaded with stormy weather.

EMX Company Ltd was founded in 1999 by AUTIF the then regulatory body responsible for collective investment products. AUTIF is now part of IMA but the success of EMXCo caused Euroclear to come calling and they are now part of the Euroclear Group.

When EMXCo was founded the dealing, settlement and valuation of collective investments was unbelievably archaic. Even for an industry that builds fences against change, this area of the market was exceptionally bad. It was allowed to be “bad” by a kind of inertia within those people working within the industry. Change breeds fear and of course costs. Despite the rest of the market pressing ahead undergoing technology changes whilst creating new standards and developing international cross border business. Collective investments was stuttering and stalling and potentially becoming unattractive to service in or invest. No more is this the case, the transformation brought by EMXCo is fantastic!  

I believe the pragmatism used by Max Wright and his team was key to turning this ailing ship around. Without reinventing the wheel EMXCo utilised and enhanced where they could, to reduce the number of changes that financial services firms would have to make. This meant that straightaway the cost of taking part in the EMXCo solution was minimised.

EMXCo took information from the intermediaries back office and maintained it through the transaction process chain and brought immediate benefits.  Enabling a standard that eliminated errors and reduced latency as the process became automated.  Providers and intermediaries were for the first time singing from the same hymn sheet

By using FIX the automation of settlement processing starts in the front office at the order and trade execution, which creates an electronic message chain that never materialises into a manual process. The integration between the front office and back office is now established but by including all third party agents into the process the industry has a true example of STP. Imagine the same scenario used in the equity market and you would have the PLC closely connected to the market and all types of service provider by an unchanging message standard.

The electronic audit trail is well established and enables regulatory checks and balances in keeping with those demanded within the MiFID articles. Reconciliations have now become an easy occupation where once it might have taken many days and this cannot be understated in its importance.

The investing clients can receive trading reports and performance analytics much faster and problem solving can be achieved with the minimum of fuss. 

The EMXCo system is for both low and high volume users and a quick check at their extensive user list shows that they have long passed the mark of gaining market share. Latest figures show that they routed nearly 2 million messages in September 2008 and a staggering 6.1 Billion Euro of orders.  

The web browser application should allow very low end users with limited technology to join the EMXCo success story and open up the possibility of increasing industry wide STP.

The EMXCo messaging standards and their approach to solving a difficult industry problem which many in the industry thought impossible, is a example of what can happen with fortitude, imagination and the intellectual capacity to overcome legacy problems within both systems and people. EMXCo has dramatically changed the antiquated settlements and manual processes in the back offices of financial services firms, into modern highly efficient operations, as good as found anywhere in the world.

It could not have been imagined that when the EMXCo messaging system was launched in 2000 it would have accomplished the success it has by transforming a technology backwater into what we see today.

It has not been easy for Max Wright and his team and they have had to carry all their shareholders through many dark days but the rewards are now there for all to see. Their initial objectives have been wonderfully achieved and a continuous explosion of EMXCo messages thundering through the industry has demonstrated this amply. EMXCo have made a quantum leap into industry STP that can only be admired by all.

By Gary Wright