Asian Private Banker

Multi-dealer platform Contineo has launched a new solution for private banks in a bid to fill a servicing gap in the structured product secondary market…

Given that market conditions have not been favourable for eld testing the automation of large volumes, 2016 has proven a tough year for gauging the absolute effectiveness of multi-dealer platforms. Invariably though, exceptional multi-dealer platform providers hold a long-term mentality and the belief that a business driven by markets and appetite demands perseverance.

One such provider has remained resilient amidst financial, economic, and political head- winds. Contineo, the equity-linked platform supported by a gallery of bulge bracket providers, experienced an exponential growth in orders and a doubling client base in what managing director, Mark Muñoz, calls a banner year.

“The volume increase was not deterred by overall market performance as we rolled out access to relationship managers and more trade desk users,” he says.

Muñoz attributes Contineo’s success to a number of developments to the platform, with the rm rolling out updates to tools like Contineo I/O, a data service that allows for mar- ket analysis through evaluation of user data. us far, these updates have numbered an impressive 50, including the implementation of utilities for the amendment of orders and the uploading of complex pricing requests through spreadsheets.

“These new features are widely praised by our clients and have also increased the amount of flow the firms trade electronically,” he adds. “We are very excited for the next steps in the company’s growth. We are currently working with our clients to determine the next set of payoffs and how we can assist in post-trade services, as well as further enhancing our new data services.”

For its continuous commitment to enhancement and a ra of new milestones achieved, Contineo has been voted as this year’s Best Multi-dealer Platform.

ABOUT CONTINEO

Contineo is the first industry supported, open messaging network for private banks and wealth management firms to access issuers of structured products. Together we are a community with a shared vision and purpose.

We believe that technology should be intuitive, easy to access, and available to all participants. This means creating an open messaging standard in concert with the buy-side and sell-side, and enabling access to all parties, including other certified technology vendors.

This mission is shared by our current subscribers, who recognise the importance of an open, efficient and transparent network.

“This will be the very first time anyone has been able to quantify the landscape for equity structured products,” said Mark Munoz, Contineo CEO.

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The multi-issuer platform and messaging network currently has HSBC, BNP Paribas, Goldman Sachs, JP Morgan and Societe Generale on its sell side roster. It will distribute equity linked notes, knock-out equity linked notes, accumulators, decumulators, fixed coupon notes, DRAN and OTC options to private banks.

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“Julie comes to us with strong international experience in financial technology operations, and expertise in the structured products space,” said Munoz. “We are fortunate to have her on the team and look forward to her contribution as we prepare to go live.”

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“Julie comes to us with strong international experience in financial technology operations, and expertise in the structured products space,” said Munoz. “We are fortunate to have her on the team and look forward to her contribution as we prepare to go live.”

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Contineo is opening its doors to more technology providers, allowing them to increase access, lower operating connectivity costs, and build networks offering more products.“Technology providers only need a single connection to write an API (application program interface), versus the large infrastructure with multiple protocols they deal with today,” says Mark Muñoz, managing director of Contineo Limited in Hong Kong.

Contineo already offers structured products to private banks through a consortium of six investment banks: BNP Paribas, Goldman Sachs, Société Générale Corporate and Investment Banking, HSBC, J.P.Morgan, and Barclays.

The addition of multiple technology vendors will result in more options for the private banks, as well as lower error rates, according to Muñoz. He added that there were no limits to the number of certified technology providers Contineo can partner with, and the price of the platform for private banks remained independent of the number of vendors.

Signing onto a multi-dealer and multi-vendor platform will also lower operating connectivity costs faced by many providers when adapting to various private banking technology suites. This is in addition to providing greater access for external product providers.

“Technology providers must manage a costly infrastructure where they have dedicated servers and lines to multiple issuers,” says Muñoz. “They must also manage a divergent set of templates or protocols with each issuer. Not only is there high capital expenditure to manage the infrastructure, but there is also a high maintenance cost to keep up with each bank’s interface.”

Contineo supports messaging for equity-linked notes (ELNs), including knock-out equity linked notes (KOELNs), accumulators/decumulators, fixed coupon notes (FCNs), daily range accrual notes (DRANs), and over the counter (OTC) products through a single API connection for its Hong Kong and, more recently, US, Singapore and Japan markets.

Muñoz believes there is room for more products on the platform because of the expected influx of issuers and technology vendors. “For example, it is feasible that a technology provider like Sungard could connect to Contineo and supplement its current equity network,” he says.

Muñoz added that Contineo was in discussion with five technology companies that cater to the wealth management sector. “We see about 10 firms that could benefit from connecting to Contineo just in Asia alone.”

The company officially launched in Asia earlier this year after spotting a significant gap in the market for a technology platform that allows private banks to gain access to multiple third-party providers in a broker-friendly manner.

The six investment banks joined with Singapore-based technology provider, AG Delta, to automate the sale of equity-linked structured notes to private banks in the region. The launch came as multi-dealer technology providers began infiltrating the market, with the likes of Vontobel’s deritrade. The Swiss bank’s platform is known for distributing its own products. However, Contineo’s arrival has brought a choice of products through different bank offerings onto one platform.

At present, many banks, including BNP Paribas, operate on in-house single-dealer platforms that utilise Cortex FX and Smart Derivatives to cater to non-flow structured products. While many acknowledge the merits of using one dealer, the cost cutting and efficiency of multi-dealer platforms is evidenced by the French lender’s signing on to Contineo.

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