NEX Optimisation Launches Automated Settlement Netting Service

NEX Optimisation Launches Automated Settlement Netting Service
03.07.2017 11:00 am

NEX Optimisation Launches Automated Settlement Netting Service

Infrastructure

NEX Optimisation, which helps clients reduce complexity and optimise resources across the transaction lifecycle, announces today that it has launched the industry’s first fully automated Settlement Netting Service to streamline the bilateral settlement netting process for market participants. 

The Settlement Netting Service will automate settlement netting of over-the-counter foreign exchange (FX) trades and will expand its offering to all asset classes in the future.

Settlement failure rates are estimated at approximately 3% for the $1.5 billion (USD equivalent) which is settled on a daily basis between clients and their dealers. NEX Optimisation’s new service will eliminate the manual process of netting between clients and their dealers by applying an API to seamlessly communicate with the clients’, banks’ and custodians’ systems and reconcile payments. Through an automated workflow, market participants will have complete visibility into and control over the payment preparation process for net and gross trades, which will minimise their intra-day settlement exposure, reduce settlement fails and provide greater certainty of funding needs.

Developed using Traiana’s technology infrastructure, the service will bring multiple benefits to the market such as: 

- Improved settlement efficiency by reducing the lead time between netting and settlement which results in additional credit to support trading activities;
- reduced operational and funding costs, settlement fail breaks and costly claims;
- reduced risk exposure and adherence to regulatory regimes such as the FX Global Code of Conduct and settlement risk management principles (BSBS 241, SR 13-24);
- an increase in the number of trades that can be net settled; and
- a standardised process for netting participants. 

Joanna Davies, Managing Director at Traiana, said: “The Settlement Netting Service will allow traders to execute with any bank on any trading venue and enjoy optimised, efficient, automated and consistent post-trade processing from execution through settlement. 

Settlement netting processes have traditionally been fragmented across organisations and asset classes, requiring extensive manual processing, which does not reflect the way in which the market is moving. By automating the entire netting process via a central hub, we’ve brought an essential tool to the market that will significantly reduce breaks and have a direct impact on costs for our clients.”

Related News

Shaping the New Normal for Tech Post COVID-19

C-suite Fortune 500 technologists set to unite on 30th July to delve into what the recent pandemic means for the future of customer behavior, new digital offerings, and the... Read more »

Singapore homegrown SME Neo & Partners Global wins Best Infrastructure Provider at the WatersTechnology Asia Awards 2020

Neo & Partners Global, a finance & technology group serving the capital markets sector buy-side community of commodity... Read more »

Nine in 10 Financial IT Leaders Say The Very Survival of Their Firms Depends on Digitalisation in the Next Two Years

 Mendix, a Siemens business and the global leader in enterprise low-code, released a survey showing that, despite being one... Read more »

ConsenSys Codefi Announces Ethereum 2.0 Staking Pilot Program with Six Members

ConsenSys Codefi is launching an Ethereum 2.0 staking-as-a-service platform with institutional functionality for... Read more »

Banking Circle adds USD Amazon collections for its marketplace customers

Banking Circle, the innovative financial infrastructure provider, has enhanced the tools available to Payments businesses for their marketplace customers. Payments businesses... Read more »

Magazine
ALL
Free Newsletter Sign-up
+44 (0) 208 819 32 53 +44 (0) 173 261 71 47
Download Our Mobile App
Financial It Youtube channel