17 June 2015
INCREASED COSTS AND RISKS A KEY CONCERN IN TRADE CONFIRMATION PROCESS
New regulations to introduce increased focus on timeliness and data quality
London, Wednesday 17 June 2015 – Trax, a leading provider of capital market data, trade matching and regulatory reporting services, recommends in its new white paper that, as best practice, market participants should confirm the details of a transaction within 15 minutes of execution to better manage costs and risks in preparation for impending regulation.
The white paper titled, “Post-Trade Risks… Settling the Costs”, was published today and outlines the costs and risks associated with failing to properly identify and resolve post-trade events on trade date.
In October 2014, the European capital markets transitioned from a T+3 to T+2 settlement cycle, prompting the market to more actively consider the efficiency of its post-trade processes. With the advent of the Central Securities Depositories Regulation (CSDR), the Securities Financing Transaction Regulations (SFTR) and the Markets in Financial Instruments Directive (MiFID II)/Markets in Financial Instruments Regulation (MiFIR), regulation will require greater accountability on the quality and timeliness of a firm’s confirmation, settlement and reporting activity.
Chris Smith, Head of Trax and Operations Services, MarketAxess and Trax, said: “Impending regulation is driving how the market reviews it operational activities throughout the trade lifecycle. Verification of data, of trades, and of processes is now an essential aspect of post-trade if we are to manage and control operational risk.”
Trax Match provides firms with the necessary automated and standardised matching process to identify and resolve cash and repo trade discrepancies in near real-time. Trax recommends that the industry confirm the details of a trade within 15 minutes of execution by using an operational risk management tool like Trax Match. In preparation for the changing regulatory landscape, the architecture of the Trax platform has recently been upgraded and will be further enhanced to include a new client-facing, web-based platform, providing a flexible work environment to enable clients to more effectively monitor their workflows, matching rates and associated risks.
Camille McKelvey, Post-Trade Product Manager, Trax, said: “Firms now need to identify and correct trade data errors earlier in the trade life cycle. Trax is delivering solutions to its community of clients to improve controls and deliver more accurate datasets, thereby meeting the increasing demands for effective operational risk management.”
Trax is a leading provider of capital market data, trade matching and regulatory reporting services to the global securities market. In 2014 Trax processed 1.1 billion of transactions on behalf of its user community. Trax provides capital market firms with information to assist them in conducting net asset valuations, mark-to-market calculations, fixed-income portfolio mapping, liquidity and volume modelling, as well as reference data population updates. It also provides a wide range of pricing data for approximately 74,000 unique bonds, volume data on over 53,000 individual bonds as well as securities reference data for over 310,000 government bonds, corporate bonds, medium-term notes and private derivative issues.
Trax is based in London and was originally established in 1985. Acquired by MarketAxess in 2013, Trax is a trading name of Xtrakter Ltd. and is a wholly owned subsidiary of MarketAxess Holdings, Inc. For more information, please visit www.traxmarkets.com.