FX Derivatives Get Post-Trade Support12.15.2011
MarkitSERV implements new messaging technology to speed transaction flow.
An increase in electronic trading of FX derivatives is calling forth supporting post-trade processing services, similar to those provided for other OTC asset classes.
TwoFour, a specialist provider of global real-time financial software solutions, has entered into a technology partnership with Logicscope, a provider of post-trade solutions that was acquired by MarkitSERV in September 2011.
“Many institutions continue to struggle with processing FX derivatives and need a solution that helps automate these complicated processes,” Chris Davis, co-founder and global head of sales at TwoFour, told Markets Media. “Volumes continue to increase and clients need to hedge their FX positions.”
Over the last year, MarkitSERV has been working with the industry to expand its service to support trade processing and clearing for FX.
Logicscope’s complementary technology and comprehensive product suite will enable MarkiSERV to offer the same standards of trade processing, connectivity and compliance to FX market participants that it currently offers for credit, rates and equity derivatives, MarkiSERV CEO Jeff Gooch said in September.
TwoFour and Logicscope have created an interface that delivers enhanced FX post-trade solutions to mutual clients.
Efficient management of the post trade lifecycle requires that service providers work closely together, leveraging their collective expertise to meet the precise and challenging requirements of different client segments, according to Nick Dyne, head of business development for MarkitSERV’s FX business and founder of Logicscope.
MarkitSERV TradeSTP, the post trade technology platform developed by Logicscope, consolidates, transforms and routes normalized trade messages seamlessly to TwoFour for processing.
As trades hit the Two Four interface, MarkitSERV TradeSTP converts them, in real-time, into FpML format, allowing for speedy and uniform delivery to TwoFour’s FX back office solution, said Davis.
With all messages in the same format, TwoFour is able to more efficiently manage cross-asset position keeping, risk management, confirmation processing, netting, settlement processing and accounting, supporting more complex processing and tighter integration of post-trade workflows, Davis said.
Foreign exchange derivative transactions are taking place increasingly on automated systems, as users seek to extract cost savings from their OTC businesses.
TradingScreen’s TradeFX platform, for example, enables clients to efficiently trade FX without complex integration across platforms and to handle post-trade needs seamlessly through allocation, reconciliation and staging, from front to back-end systems, the company said.
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