LATEST ARTICLES | OPERATIONS
The European Commission has granted Euroclear UK & Ireland (EUI) the ability to continue to offer issuer central security depository (CSD) services after the Brexit transition period ends on 31 December 2020.EUI will be able to continue settling Irish-domiclied funds and securities up until the end of the new extension period of 30 June 2021.This comes as the EC has decided to adopt an implementing act determining the legal and supervisory requirements for UK CSDs as equivalent to those in the EU.
A market survey by Acuiti has found that almost all tier one and tier two banks queried plan to invest more in derivatives post-trade operations over the next three years than in the last three, as a result of the COVID-19 fuelled market volatility seen in the first months of 2020.Almost half of tier one and two banks that responded to the survey are expecting to invest more than $5 million over the next three years in “long-awaited upgrades to post-trade processing capacity”.
Foreign exchange settlement specialist CLS will provide its netting calculation platform to clients of global FinTech provider Finastra under a new partnership. Finastra’s clients, including over 800 corporate and buy-side firms, will gain access to the CLSNet platform following an integration between CLS and the Finastra Fusion confirmation matching service.
Major investment banks will increase investment in post-trade infrastructure after reporting failures with back-office processes during the market volatility earlier this year.According to a recent survey by Acuti, 95% of tier one and tier two banks are planning to invest more than $1 million in post-trade infrastructure over the next three years, with 45% hoping to invest more than $5 million.
The Central Bank of Iceland (CBI) and SIA, a European hi-tech company in payment services and infrastructures, have gone live with the new real-time gross settlement system (RTGS) and the new instant payment platform.The new payments system is a more strategic and modern infrastructure and enables closer cooperation with other central banks.CBI manages all interbank payments in the country: it currently processes up to one million payments with peaks of 160,000 per hour despite the small population of just over 365,000.
At a time when the costs of doing business are skyrocketing, is it sustainable for banks to persevere with the current approach to trade settlement failure?While there will always be trades that fail, the tolerance levels of banking boardroom execs must be at breaking point right now if the latest Esma Trends Risks and Vulnerabilities (TVR) report is anything to go by. The study shows a dramatic surge in the level of settlement fails during the second half of March, with fails climbing to around 14 percent for equities and close to six percent for government and corporate bonds.
The Governing Council of the ECB has decided to reschedule the launch of the Eurosystem Collateral Management System (ECMS) from November 2022 to November 2023.This development follows the Governing Council’s earlier decision to extend the timeline of the T2-T2S consolidation project by one year. It addresses the concerns of market participants that the current adverse environment would hamper their preparations.
Regulators for the UK and US derivatives markets have signed a new cross-border supervisory agreement for clearing houses operating in both countries. The Bank of England (BoE) and the US Commodity Futures Trading Commission (CFTC) announced the signing of a new memorandum of understanding (MOU) where they have established a cooperation framework for overseeing international clearing houses.
New layers of risk and complexity call for holistic, collaborative and cross-border responses.As a vast majority of the financial industry's workforce continues working remotely, organizations are operating in entirely new ways. No one could have predicted at the end of last year that a global pandemic would impact the world's workers in 2020 and force millions of financial services staff, and staff across other industries, into a remote work environment.
The International Securities Lending Association (ISLA) has formed three new steering groups to address the regulatory, digital and associated market practice changes the industry is experiencing through the recent pandemic.ISLA runs a variety of working groups for its members, covering all aspects of advocacy, tax, legal, regulation and best practice in order to allow members to discuss challenges, debate issues, conceive ideas and seek solutions.
The Monetary Authority of Singapore and nine international banks have leant their weight to the establishment of a research institute dedicated to green finance research and talent development.The Singapore Green Finance Centre, run by Imperial College Business School and the Lee Kong Chian School of Business at Singapore Management University (SMU), will pursue research to help develop strategies for policy makers and financial institutions to support Asia’s transition to a low carbon future.
The Bank of Japan will begin central bank digital currency (CBDC) experiments early next year but says it still does not yet have any plans to issue its own digital yen.Central banks around the world have been grappling for years with the pros and cons of creating their own digital currencies.
HSBC has been appointed as the as the full securities service provider by Haitong International Asset Management (HK) Limited for Haitong MSCI China A ESG ETF, the first broad-based environmental, social and governance exchange-traded fund listed on Hong Kong Stock Exchange.
Buy-side members must begin reporting under the EU's Securities Financing Transactions Regulation (SFTR) from today as part of the third phase of implementation.SFTR reporting obligations now apply to investment funds, pension funds and (re-)insurance undertakings, which join sell-side firms, central counterparties and central securities depositories that began reporting in July.
This Finadium report investigates current dynamics in the Total Return Swaps market with a focus on bank resource optimization. We deliver market sizing through H2 2020 and analyze the dynamics that lead to a continued preference for TRS over physical financing transactions.
Central clearing counterparty (CCP) LCH SA will support the clearing of bonds issued as part of the European Union’s temporary support to mitigate unemployment risks in an emergency (SURE) programme.The bonds issued as part of the scheme will be eligible for clearing at LCH SA’s RepoClear service. LCH SA offers clearing of euro-denominated bonds and repos across 13 government bond markets. It will also support and clear the upcoming Next Generation EU Bonds.
As much as 30 percent (500,000) of legal entity identifiers globally are out of date and in need of renewal, according to LEI Worldwide, a GLEIF-registration agent and LEI provider.LEIs are a 20-character alphanumeric code that, as the name suggests, allows regulators to identify individual counterparties in a transaction.They are currently required under several rules frameworks including the Securities Financing Transactions Regulation and the European Market Infrastructure Regulation, among others.
TORA, the provider of industry leading trading technology, has today announced that it has expanded its multi-asset Order & Execution Management System (OEMS) trading platform to support fixed income.TORA’s OEMS now offers a range of proprietary tools to help traders access bond liquidity and to efficiently execute and manage bond orders across a broad range of sectors. With coverage across government, sovereign, supranationals, agency, investment grade corporate bonds, high yield, emerging markets, covered bonds and municipal bonds the new offering will appeal to global fixed income managers. This adds to existing coverage of fixed income futures, options and ETFs.
In collaboration with Tier 1 banks, SmartStream has launched Affinity, a new artificial intelligence (AI) ‘observational learning’ solution.SmartStream’s new solution is set to meet the technical demands and business agility for operational data management and data quality processes.
Due to the continued economic uncertainty from the coronavirus response, the Federal Reserve Board on Wednesday announced it will extend for an additional quarter several measures to ensure that large banks maintain a high level of capital resilience.
The European Securities and Markets Authority (ESMA) has confirmed LCH, ICE Clear Europe, and LME Clear will be recognised as third country central counterparties (CCPs) from January 2021.The three UK CCPs will be eligible to provide services in the EU after the end of the transition period following the withdrawal of the UK from the EU on 31 December 2020.
US financial market participants must pull together to achieve complete securities dematerialisation and improve market stability, according to the Depository Trust & Clearing Corporation (DTCC) in a new whitepaper.The transition from physical certificates to electronic records, DTCC argues, would reduce the risks and costs associated with manual processing and human touchpoints, while also increasing efficiency and resiliency at a time when automation is more important than ever.
Market volatility has been the order of the day in 2020, as firms across the globe react instantly to the latest developments, whether that be Covid-19, the global economic downturn or geopolitical tensions. This volatility shows no signs of letting up, with the uncertainty around this year’s presidential election stoking yet another wave of uncertainty.
Euronext’s Anthony Attia gave the keynote starting PostTrade 360° Copenhagen on Wednesday morning, 23 September. As member of the management board, with a heavy role in the post-trade area, he sees new opportunity for his groups three CSDs to take a strong position as Europe’s CSD market is being consolidated. Portugal’s Interbolsa was the group’s first CSD, Norway’s VPS was acquired in 2019 and Denmark’s VP Securities this summer.
Hedge Funds are absorbing a punishing $8 million annual hit to their Assets Under Management (AUM) due to high levels of manual processes and outdated trading systems that are causing delays in sending orders out to market. According to a new analysis from TradingScreen, a typical mid-sized long/short equity hedge fund ($5 billion AUM) wastes, on average, 2.5 hours per day dealing with 200 orders.