Joanna Davies, Traiana
NEX Optimisation's Settlement Netting Service uses Traiana's technology infrastructure to 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 aims to eliminate the manual process of netting between clients and their dealers by applying an API to communicate with the clients', banks' and custodians' systems and reconcile payments. Through an automated workflow, market participants will have visibility into and control over the payment preparation process for net and gross trades, which can help to minimise intra-day settlement exposure, reduce settlement fails and provide greater certainty of funding needs.
Joanna Davies, Managing Director at Traiana,
said: " 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."