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If you know exactly what you need, a flock of clearing firms are eager to provide it--and at a good price as technology slashes processing costs. times could hardly be better for correspondent brokers shopping for clearing services. In the mid-1990s, driven by technology, regulatory changes, and competitive necessities, the major clearing firms are busy trying to outdo each other in developing a universe of new services to offer their correspondent and prime brokerage customers.
Looking for customized consolidated statements like the wirehouses send out? Order entry from desktop PCs to speed service to clients? Would you like to have cash management accounts, research and client reference checks? Or maybe you're just starting out and need office space, communications facilities and perhaps a little credit? All you have to do is ask, and a passel of clearing firms will flock to fulfill your needs--and probably at an excellent price as advancing technology ups the speed and brings down the costs.
HERE COMES T+3, READY OR NOT
Spurring the development of new services is T+3, the start of three-day settlement for securities trades next June 1st. After noisy debate, the SEC will have its way some six months from now, cutting two days off the traditional five-day settlement period and requiring broker-dealers and their customers to pay for purchases and deliver securities sold in 40 percent less time than before.
Small wonder that the major clearing firms have stepped up the development of new technology and systems and are dangling a potful of expanded ancillary services under introducing firms' noses. June 1st is just around the corner and it presents clearers with a brand-new spur to offer faster, cheaper and otherwise improved products and services. If they stand to profit from T+3, so do their customers.
Beyond simply chopping two days off processing times, here are some of the new and expanded services that are now available from most clearing firms:
* Consolidated client statements;
* Daily transaction downloading;
* Desktop field order entry;
* Client reference call-ups;
* Regional and local cashiering;
* Dial-up client information;
* Cash management accounts;
* Investment research reports;
* Expanded SIP coverage.
Some liken the flood of new services from clearing firms to the marketing battle among airlines in...