Traiana Launches Swap Reconciliation Service

Terry Flanagan

Traiana, a provider of pre-trade risk and post-trade processing services, has launched a new service to reconcile client reference data ahead of the introduction of mandatory electronic trading of swaps on swap execution facilities (SEFs). The new service, using technology provided by Duco, reconciles reference data from disparate sources provided by CCPs, SEFs, futures commission merchants (FCMs), buy-side firms and swap data repositories.

The service will allow Traiana to help its customers to reconcile significant volumes of data and ensures that clients are not prevented from trading by clerical errors or mismatches in static data regarding accounts, limits or SEF trading identifiers before the regulations come into force in mid February. The service is currently being rolled out to all Harmony CreditLink and CCP Connect customers for rates and CDS.

“There will be a huge surge of clients moving into electronic trading, many for the first time, and the volume of data that the industry is dealing with during this shift to a new market structure is unprecedented,” said Nick Solinger, head of product strategy and chief marketing officer at Traiana. “We are proactively investing resources to ensure that all clients are ready to trade when mandatory SEF trading goes live. Duco offers a powerful solution to reconcile this data.”

Nick Solinger, Traiana

Nick Solinger, Traiana

Traiana has integrated the Duco technology into its onboarding process for clients and FCMs. “It contains powerful reconciliation and matching logic,” Solinger said. “For example, we had a client who had a long name and their FCM referenced the account with abbreviations – New Jersey became NJ, and Management became Mgmt. Duco’s tools identified this mismatch with more than 80% confidence that the two participants were referring to the same account, allowing our team to resolve the break quickly before the client tried to trade with incorrectly referenced accounts.”

Solinger continued, “What used to be a mismatch in our onboarding process where a person had to track down the client and FCM to verify what account they were referring to, we now have a system that identifies these mismatches proactively. Now we get an exception queue that we manage with the FCMs. It’s brought much greater productivity to our onboarding team, and gives us the ability to proactively identify if a SEF opens up an account for a client but the FCM has not yet published limits for that client, we can identify such breaks in a very flexible way.”

Traiana is currently working with its customers to manage reference data for over 10,000 clearing accounts from 400 clearing clients and 15 FCMs.

Traiana CreditLink provides trading platforms, clearers/prime brokers, executing banks and buy-side firms the ability to monitor and manage pre- and post-trade credit in real-time across multiple trading venues in a consolidated view. CreditLink supports trading models across FX, exchange traded derivatives, CDS and fixed income and serves hundreds of buyside, broker, prime-brokers and trading venues.

“Our industry initiative for pre-trade screening of SEF transactions continues to be the central service for the swaps industry as it implements SEF trading,” Solinger said. “The SEFs are functioning well. When the October 2 and then the November 1 deadlines happened, many of the rules had only been clarified on September 26, so the industry was racing to comply with that revised guidance. Now that the industry has had time to respond, we’ve seen very few issues with clients migrating to SEFs.”

Duco Cube is an intelligent hosted matching and reconciliation service. “We are pleased to be working with Traiana on this critical piece of market infrastructure,” said Christian Nentwich, co-founder and CEO of Duco. “This partnership ensures a smooth onboarding process for operations teams and removes technical barriers to adoption, values that are close to the heart of both companies.”

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