02.10.2012

Self-Clearing Tempts Brokers

02.10.2012
Terry Flanagan

Done correctly, self-clearing allows firms greater control over business.

For the sell side, the move toward self-clearing offers tangible benefits, but also entails risks, which to be handled effectively requires a deep bench of IT and domain experts.

“The challenge historically for firms to make this transition work effectively has been the upfront investments needed in both technology and experienced people, and achieving scale in this model more quickly,” Joseph Barra, president of International Securities Processing and Global Outsourcing Solutions, which is part of Broadridge Financial Solutions.

In a fully-disclosed relationship, the introducing broker must disclose the identity and other relevant information regarding its client to the clearing broker.

Self-clearing firms have full control over financing their business, optimizing revenue opportunities and determining service and product offerings.

“Firms typically want to have greater control over their business and accelerate growth,” said Barra. “Additionally, a self-clearing model enables a broker-dealer to maximize their revenue opportunities and often times reduce costs.”

Broadridge’s consolidated business process outsourcing (BPO) services support self-clearing through a combination of global asset servicing, client reporting, reconciliation and clearance and settlement for all product classes, said Barra.

“Broadridge brings deep domain experience and expertise in both technology and people along with its already robust client base which further provides the necessary level of scale on day one,” he said.

Broadridge’s solution can be deployed in its entirety or in key strategic parts on a turnkey basis.

“It’s important to note that this model is equally effective for firms who are already self-clearing if they’re interested in significantly reducing costs, increasing focus on their customer facing investments and activities, and yet not giving up on the benefits of controlling your own business,” he said.

Bloomberg Tradebook has selected Broadridge’s BPO solution to support its equity and option clearance and settlement business.

The agreement is designed to help Bloomberg Tradebook minimize its fixed-cost investment in technology and operational infrastructure, while also creating new revenue-generating opportunities as it transitions from its current fully-disclosed clearing model to self-clearing.

“This will enable Bloomberg to reduce their infrastructure investment, accelerate their growth, gain economies of scale and leverage our highly experienced staff and industry best practices,” Barra said.

HSBC AI Markets harnesses natural language processing to meet market participants’ trading and hedging needs, from pre-trade analysis, to execution, to post-trade. Markets Media caught up with Tom Croft to learn more about the platform.

#AIMarkets

“Portfolio trading is a massive improvement in efficiency.”

What impact do you think portfolio trading will have on the future of bond market structure?

#PortfolioTrading #Trading

Asset owners are investing heavily in data, from AI to ESG to real-time tools.
What’s the top priority for the data suite? 👇

#AssetOwners #FinTech #AI #ESG #Data

At #TradeTechFX Barcelona this week, LMAX Group Managing Director of Digital Assets, Jenna Wright, joins @TheBondDESK @marketsmedia to discuss how FX desks are adapting to the rise of digital assets.

She’ll explore market convergence, regulation and the investor opportunities…

Load More

Related articles

  1. The proposed ACS Triparty service has been developed to facilitate greater access to central clearing.

  2. FMX Futures Exchange was launched in September last year to compete with CME Group.

  3. 94% of traders believe margin savings can be realized between their USD swaps and USD futures.

  4. This aims to solve concerns around the U.S. Treasury Clearing mandate.

  5. Publication by the SEC is a key step in the regulatory approval process.

We're Enhancing Your Experience with Smart Technology

We've updated our Terms & Conditions and Privacy Policy to introduce AI tools that will personalize your content, improve our market analysis, and deliver more relevant insights.These changes take effect on Aug 25, 2025.
Your data remains protected—we're simply using smart technology to serve you better. [Review Full Terms] | [Review Privacy Policy] Please review our updated Terms & Conditions and Privacy Policy carefully. By continuing to use our services after Aug 25, 2025, you agree to these

Close the CTA