BACKGROUND

Computershare Markets Technology is an independent and global business unit of Computershare Technology Services, providing business critical software systems for automated trading in financial instruments, order routing, real time surveillance of market activity, and post-trade clearing and settlement.

A major event for the group was the purchase of the software assets of our nearest competitor, EFA International of Canada. Computershare Markets Technology now has the largest installed base of exchange systems of any supplier. Client relationships that have flowed from this purchase have strengthened our ongoing revenue stream from support agreements. Forty national and other exchanges, Central Securities Depositories and surveillance authorities now depend on Markets Technology systems.

PRODUCTS AND CLIENTS

All products are built on open platforms, with scale and flexibility paramount in their design, providing customers with solutions that facilitate long-term expansion of their operations without being limited by the technology.

• X-stream, our flagship product, is an extremely high performance trading platform used to trade all types of financial instruments, from equities and fixed interest to the most sophisticated multi-leg derivative strategies. It is the only product available that can trade all these instruments on a single platform and is particularly suited to the world’s largest exchanges.
• Horizon is an automated trading and market management system tailored for markets that are automating for the first time or in the early phases of growth. It is a fully functional system for trading cash based instruments (equity, warrants, bonds). Combined with Equator it provides complete settlement, clearing and depository functions for a national exchange.
• Equator, Computershare’s clearing, settlement and depository solution, is the most widely used CSD solution in the world. It provides complete, flexible and reliable processing of trades through to settlement, credit and inventory management and advanced collateral management facilities, including stock borrowing and lending.
• ORMS, our Order Routing Management System, is a high performance, fault tolerant system that routes orders to multiple markets from a single point. ORMS continues to support the growth of Computershare’s dealing system by providing the necessary exchange connectivity.
• SMARTS is a world leading system that protects market integrity in fast-paced, volatile investment environments, through a complete set of surveillance tools for market regulators and securities commissions. It alerts authorities in real time, to any market improprieties and assists in ensuring a fair and efficient market.

SIGNIFICANT EVENTS

• Completed the delivery of X-stream to ICAP plc, the world’s largest inter-dealer broker.
• Purchased the software assets of the former EFA International, a Canadian competitor with clients in 25 countries.
• Delivered further technology to Helsinki Exchanges, which operates the Helsinki and Tallinn Stock Exchanges.
• Signed agreement with Oslo Börs to develop realtime surveillance in SMARTS for indexes, warrants, options and futures for both the Oslo Börs and Stockholmbörsen – a world first.
• Signed agreement with the Icelandic regulator to SMARTS, consolidating SMARTS position as the world leader in this field.

MARKET CONDITIONS

In 2002, a year characterised by limited activity, financial exchanges, regulators and CSDs spent an estimated US$200m on externally sourced central systems. This market spend plus the large emerging-market customer base and relationships that have flowed from the EFA purchase, provide a key opportunity for growth. Emerging markets are expected to follow the traditional pattern of growth requiring improved market regulation and surveillance all of which can be provided by Computershare Markets Technology.