OMGEO WINS SEC APPROVAL TO END PAPER DISCLOSURE REPORTS

Posted April 28, 2008

NEW YORK – The US Securities and Exchange Commission has granted a no-action letter to securities industry post-trade matching service Omgeo, voiding the need for paper disclosures tied to trade confirmations.

A group of prominent broker-dealers, investment managers and industry association members, including operations professionals from Goldman Sachs and Merrill Lynch, pressed the SEC for the ruling, which will eliminate several hundred million pages of paper from the securities industry annually.

“It is critical to remain in compliance with Exchange Act Rule 10b-10,” says Lisa Ilaria, Chairperson of the Asset Managers Forum, part of SIFMA [the Securities Industry and Financial Markets Association]. “However, there is no need to rely upon countless reams of paper to do so. We were pleased to aid Omgeo and our members in lobbying efforts to eliminate the paper confirm disclosure, as we know how costly and risky it can be to rely upon paper-based documents.”

Omgeo’s broker-dealer community can satisfy all of their confirmation delivery obligations to investment manager clients electronically. The SEC letter essentially states that providing access, via a URL, to the pages of disclaimers and disclosures that brokerage legal and compliance functions typically include on the back of a trade confirm (known as the “confirm disclosure”) is sufficient for compliance with Exchange Act Rule 10b-10 (a). Previously, despite the availability of electronic confirms, the information contained in the confirm disclosure had to be sent in hard-copy, which resulted in tremendous cost and inefficiencies associated with large amounts of paper, storage fees and postage.

“Omgeo is pleased that, with tremendous support from our community of clients, we were able to obtain the no-action letter swiftly and that the SEC were so responsive to our issues,” says Lee Cutrone, Managing Director, Industry Relations at Omgeo. “This support from both our users and our regulator sends a resounding message that pain points can be resolved smoothly with the backing of our industry. Our community has always been our strongest asset, and that has never been more obvious than now.”

The repository that will house TradeSuite confirm disclosures will be available later this year.