Members of the Society for Worldwide Interbank Financial Telecommunication voted this week to give investment management firms access to the organization's global messaging network.
The group, also known as Swift, is a Brussels-based consortium of 2,044 banks that operate a telecommunication network for payment confirmations and other financial messages.
Wednesday's vote, in which 95% of the members approved the step, will allow institutions such as Fidelity Investments Inc. or the California Pension and Retirement System to use Swift to send and receive confirmation and payment messages for securities transactions.
Impact on Banks
It could also benefit commercial banks by allowing them to automate their communications with investment management firms, thereby reducing operating costs and the risk of data entry errors.
"Swift is a cheaper way for banks to deal with investment firms, if they don't have an inhouse link," said Michael Sipe, vice president, First Bank Systems Inc., Minneapolis.
In addition, the fees that investment firms pay to use Swift can help strengthen the network for the bank shareholders, Mr. Sipe added.
Participants, Not Owners
Investment firms will be allowed to participate but not to own shares in the system. Shreholders pay about $65,000 to join Swift; participants pay about $44,000. Both shareholders and participants pay annual fees of about $4,000.
Swift recently appointed a new chief executive, Leonard H. Schrank, to replace Bessel Kok, who resigned from the organization in 1991 to become an executive at a European telephone company.
Mr. Schrank, 45, spent 10 years at a unit of Chase Manhattan Bank in London. A native of the United States, he was most recently president of a communications software firm based in Boston.