Plato Partnership, the not-for-profit member association at the forefront of driving innovation in the equities marketplace, this week published a letter supporting the modernisation of ECM workflow through the implementation of an electronic model with industry providers. The letter was shared with sell-side ECM teams, buy-side market participants, and primary book-building platforms. It requested their support in Plato Partnership’s initiative to build an electronic model with industry providers that integrates buy-side E-OMS and bookbuilding platforms.

The letter reads as follows:

Dear Market Participant,

Plato Partnership believes it is the right time to focus on improving the electronic workflow for entering orders and receiving allocations in the IPO and secondary issue equity markets. Despite increased electronification across equity markets, order entry and allocations for new issues and secondary trades has remained a largely manual process.

We recognise there are challenges in integrating the diverse range of electronic solutions offered by various providers. However, the benefits of streamlining this workflow are clear. An electronic equity capital markets workflow process can improve governance, enhance efficiency, and reduce administrative errors for buy-side and sell-side.

Asset managers have sometimes been cited as resistant to change in this area. This letter aims to signal buy-side support for electronifying the equity capital markets workflow. While implementation costs are a valid concern, the long-term savings from reduced errors and improved workflows outweigh these upfront costs.

In fact, the Investment Association has recently published a position paper calling for collaboration between buy-side and sell-side firms to automate IPO processes. They are mobilising industry participants through a working group to drive progress in this area.

Plato Partnership is aligned with this vision and welcomes any initiatives that advance the electronification of workflows in the equity capital markets. We believe these improvements will benefit the broader financial ecosystem.

Our model has been defined and agreed upon by Plato Partnership’s buy-side and sell-side members and has Primary Portal providing an end-to-end electronic workflow by integrating with both buy-side E-OMS and sell-side bookbuilding platforms to enable an end-to-end electronic workflow while ensuring sell-side processes are not impacted. Primary Portal is currently working closely with the major global equity book-building platforms and buy-side EMS/OMS providers with a view to implementing this model next year.

Please consider this letter as an expression of our support for modernising these important post-trade processes. Plato Partnership also requests the support of the banks, buy-side, and book-building platforms in supporting this initiative and its implementation.

Yours faithfully,

Plato Partnership

Updates on this initiative and other Plato Partnership initiatives can be found on the Plato Partnership website.

Source: Plato Partnership