Progress on Post-Trade

Terry Flanagan

Trading technology providers build out links to matching and other middle-office systems.

As post-trade processing commands greater attention from industry groups and regulators, providers of trading systems have built out linkages to the post-trade platforms.

These extensions help to accommodate users’ needs to connect to internal and external middle- and back-office systems.

Charles River IMS, for example, provides standard interfaces to middle-office (post trade processing and settlement) and back-office (accounting, fund administrators, custodians, etc.) systems.

“The customer can use CRD’s post-trade capability for middle-office processing and/or can plug into other venues such as Omgeo Central Trade Manager,”  Tom Driscoll, managing director-global at Charles River Development, told Markets Media.

“When a client decides to use one of these standard interfaces, the effort mostly includes configuration and testing,” Driscoll said. “If the client needs a non-standard interface, CRD can provide customization and testing.”Charles River IMS incorporates all phases of the order workflow, Driscoll said.

These include portfolio management (analysis and decision making to determine the size and distribution of the order), compliance (validating the trades as to conformance to established client and regulatory rules), trade management (ensuring best execution, communicating the trades to brokers/electronic destinations automatically and record/monitor the executions) and post-trade.

“The post-trade module is used to match the executions with the brokers and to communicate the details to middle-office and downstream systems,” Driscoll said.

Post-trade operations such as trade matching, confirmation, and affirmation play a key role in reducing settlement failures.

Omgeo provides a central trade matching (CTM) service, which enables trades to be matched in real time, thereby boosting same-day affirmation (SDA) rates.

The European Commission’s consultation on harmonization of securities settlement recommends establishing common EU rules on settlement discipline, including early matching of settlement instructions.

Settlement instruction matching forms an integral part of Target2Securities (T2S), a uniform, pan-European settlement system led by the European Central Bank. The ECB has set up a high-level Harmonization Steering Group (HSG) to define the top priorities and functional targets for harmonization activities going forward, and how best to deliver concrete results before the launch of T2S.

This year, ISITC (International Securities Association for Institutional Trade Communication), released updated Market Practice for Standing Settlement Instructions (SSIs) associated with cash and FX instruments. This best practices document aims to provide investment managers, brokers and custodians with a consistent standard for exchanging SSIs between parties in order to improve automation and efficiency across the industry.

Related articles

  1. Technologists can accelerate delivering software to power trading, risk management, and compliance.

  2. Bats-Direct Edge Complete Merger

    DWS will hold a stake of 30% in the new company.

  3. Saphyre’s AI platform allows data to be entered once for simultaneous access.

  4. This acquisition will enhance Symphony’s data and business insights use cases, including ESG capabilities. 

  5. Bar Raised on FX Trading

    Upgrades enable hedge funds and asset managers to gain actionable insights quicker and more efficiently.