Local Authorities in the UK Use SunGard’s STN Money Market Funds Portal to Manage Cash

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Local Authorities in the UK Use SunGard’s STN Money Market Funds Portal to Manage Cash

security of capital while ensuring immediate access to short-term cash, and a higher yield on cash not required immediately.

Several local authorities in the UK have adopted the SunGard Transaction Network’s (STN) Money Market Funds portal to help them manage their short-term investment requirements and reduce counterparty risk. STN’s Money Market portal is a global, multi-currency trading and connectivity solution for institutional money market investors, such as local governments, corporate treasurers and hedge funds. Among the UK local authorities using STN are London Borough of Bromley and Arun District Council.

In today’s economic climate, local authorities are improving their risk management techniques, and therefore turning to money market funds. Money market funds satisfy their need for higher credit quality and increased liquidity within their portfolios. STN’s Money Market Funds portal provides treasurers with a single platform to research, analyze, trade, and report on more than 200 money market funds.

Martin Reeves, group accountant for London Borough of Bromley, said, “While the Council has been investing in money market funds for a number of years, using STN has helped us to open additional money market funds quickly and efficiently. The STN portal offers greater transparency by giving us the ability to view the countries and counterparties in which the money market funds are investing, and take our own view on acceptable levels of risk. It provides easy access to a fund’s prospectus and application form, the ability to compare interest rates paid by different funds, and confirmation e-mails as soon as a deal is placed.”

Sian Southerton, accountant and treasury & investment officer for Arun District Council, said, “Since we began using STN, we more than doubled our number of money market funds. STN provides a single platform for viewing all of our money market fund trades. STN is straight-forward to use, providing views on daily yields and balances on all funds and readily accessible fact sheets on the funds.”

SunGard conducted a survey in July 2009 on the current cash investment strategies and activities of more than 60 local authorities in the Manchester and London areas. Among the findings of the study were:

  •     More than half of the local authorities surveyed best describe their cash investment strategy as “security of capital while ensuring immediate access to short-term cash, and a higher yield on cash not required immediately.”
  •     60% have changed their investment policy to invest cash across fewer individual counterparties
  •     24% of respondents reported increased use of money market funds to manage their investments.
  •     The local authorities surveyed indicated that the majority of their investments were made in short- term, fixed-term deposit and money market funds.
  •     66% indicated that money market funds will be extremely important to them over the next 12 months.

Maryum Malik, director at Sector Treasury Service Ltd, a UK-based independent treasury advisory firm, said, “Money market funds have gained in popularity as the increase in credit risk in the banking sector has led investors to seek more quality and shorter duration investments. As money market funds have the highest credit rating and the lowest volatility rating, they can provide investors with a higher credit quality vehicle than bank deposits, and are consistent with a treasury strategy that includes the objective of capital preservation.”

Bob Ward, chief operating officer of SunGard’s wealth management business, said, “Using a fully disclosed trading model, STN provides a multi-fund trading platform that helps local authorities diversify their short-term investments, mitigate risk, and better manage cash holdings across the organization.”

About STN
A trade automation, compliance and connectivity solution, the SunGard Transaction Network (STN) links institutions throughout the financial services value chain, facilitating the purchase and sale of many securities types, including U.S. and global equities, fixed income, mutual funds, money market funds, certificates of deposit, and commercial paper. Integrated directly with SunGard systems and with third-party systems, STN helps automate the entire transaction lifecycle.

About SunGard
SunGard is one of the world's leading software and technology services companies. SunGard has more than 20,000 employees and serves 25,000 customers in 70 countries. SunGard provides software and processing solutions for financial services, higher education and the public sector. SunGard also provides disaster recovery services, managed IT services, information availability consulting services and business continuity management software. With annual revenue exceeding $5 billion, SunGard is ranked 435 on the Fortune 500 and is the largest privately held business software and IT services company.

STN Brokerage Services offered throughout Europe, the Middle East, Africa and Asia Pacific are provided by SunGard Global Execution Services Limited - Authorised and Regulated by the Financial Services Authority * Registered in England and Wales No. 3127109 * Registered Office: 25 Canada Square, London E14 5LQ. SunGard Global Execution Services Limited is exempted from licensing under Australia Securities & Investments Commission Class Order 03/1099 and is regulated by the FSA under UK laws, which differ from Australian laws.

STN brokerage products and services offered in the United States are provided by SunGard Institutional Brokerage Inc. * Member FINRA/SIPC * 377 E. Butterfield Rd., Suite 800 * Lombard, IL, USA 60148

Trademark Information: SunGard, the SunGard logo and STN are trademarks or registered trademarks of SunGard Data Systems Inc. or its subsidiaries in the U.S. and other countries. All other trade names are trademarks or registered trademarks of their respective holders.

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