NEX Debuts Automated Settlement-Netting Service
NEX Optimisation officials announced today, July 3, that it has launched its automated Settlement Netting Service to streamline the bilateral settlement netting process for market participants.
“The Settlement Netting Service will allow traders to execute with any bank on any trading venue and enjoy optimized, efficient, automated and consistent post-trade processing from execution through settlement,” Joanna Davies, a managing director at Traiana. “Settlement netting processes have traditionally been fragmented across organizations 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.”
The offering will automate settlement netting of over-the-counter foreign exchange trades and will expand its offering to all asset classes in the future, according to officials.
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 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 minimize their intra-day settlement exposure, reduce settlement fails and provide greater certainty of funding needs.
Centrally cleared and settled transactions have been in continuously increasing demand.
LCH SwapAgent registered over 10,000 trades in 2021, a five fold increase.
Overall trading volumes across all products fell 8% from 2020.
Klimpel won Excellence in Human Clearing at Markets Media Group’s 2021 Women in Finance (U.S.) Awards.
Expansion to buy side increases multilateral netting opportunities for members.