MIAMI -- The fund services unit of Citigroup said it will begin testing a custody program that it says will shave a day off the time it takes to handle settlement of trades or process notices of corporate actions.
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The new custody service will cut out central processing in New York of trade and corporation action information. Instead, the processing will be handled in local offices around the world, where 85% of clients' assets are held.
The program also will remove delays caused by processing trade information more than once, in New York, locally and in some cases by a subcustodian.
By shaving a day off processing time, "the market cutoff is going to be their cutoff,'' said Fryburg, of Citi's clients.
Reducing the number of times that the same data gets entered into its system also will cut down 'fat finger' mistakes and regulatory risks, Fryburg said.
Citi provides fund services in 95 countries, out of 60 offices.
"This is really Citi's secret sauce,'' said managing director James Nolan.
The pilot will last about six months. The company expects to convert all clients over to the new system in November.
