FOCUS
more, rather than less, clearing participants. He says: “Some of them might be small, or initially ‘niche’ players but if they are an important enough client or jurisdiction the banks will need to support it. Tis all amounts to a very significant challenge for those building a robust, scaleable and flexible architecture, which we have in Harmony CCP Connect. No one wants to re-integrate the flow of additional counterparties, so infrastructures need to be highly scaleable and flexible, but at the same time forcing players to agree to a standard will not work either.”
CCP Connect provides a low-cost solution to connect banks to CCP’s and clearing clients, without imposing rigid technical protocols and standards on the client. Te client sends information in their preferred format using their preferred delivery mechanism. Te advantages of this client connectivity solution is most apparent in the bank-to-client space where a client can be connected to their bank through a single service consolidating allocation and confirmations, give-ups, and netting on flows for a range of currency products including cash, options and NDFs.
“As a clearer, having a very flexible approach and being able to accommodate client choice is very important,” adds Mandelzis. “We are providing the tools to the banks which allow for diversity, but at the same time don’t burden the clearer with the work that goes with it, into their back offices and technology.”
New complexities
Te introduction of central clearing for OTC instruments also means that certain market participants will now have to have margin management systems, and this is but one of the new complexities. Interbank activity moving to a cleared model is going to have some complexity, but nothing compared to the client trading activity, with processes for allocations and confirmations in flux.
Recently, Nomura chose Traiana to expand its ETD client service platform. Using Traiana Harmony, Nomura’s clients will be able to reconcile their executions and allocate across one or more futures commission merchants (FCMs), with real-time clearing status monitoring in Nomura’s client service portal. In addition, high volume clients can be integrated directly into the solution in their preferred protocols and message formats, allowing them to match and allocate their trades electronically. As a result, exceptions and breaks are identified intraday, not end of day, streamlining the clearing and allocation processes.
It is early days, says Mandelzis, and too early to say how banks and clearers will differentiate their services and add value, as they are simply focused on understanding the changes and implementing them to comply and work out the economic model of this business going forward.
Gil Mandelzis
“No one wants to re-integrate the flow of additional counterparties, so infrastructures need to be highly scaleable and flexible, but at the same time forcing players to agree to a standard will not work either.”
106 | january 2012 e-FOREX
However, he adds, the amount of investment needed in infrastructure to create a clearing solution and connectivity to all the market participants weakens the build versus buy case greatly. “Given the current challenges, the amount of work facing the banks, internally, is already huge. Tey should focus on where they can differentiate their services and not on the connectivity work where they cannot differentiate,” he adds.
But with still more CCPs expected to come to market, perhaps with new clearing models, there is still much work to be done to accommodate the differing needs and choice demanded by the market.
Page 1 |
Page 2 |
Page 3 |
Page 4 |
Page 5 |
Page 6 |
Page 7 |
Page 8 |
Page 9 |
Page 10 |
Page 11 |
Page 12 |
Page 13 |
Page 14 |
Page 15 |
Page 16 |
Page 17 |
Page 18 |
Page 19 |
Page 20 |
Page 21 |
Page 22 |
Page 23 |
Page 24 |
Page 25 |
Page 26 |
Page 27 |
Page 28 |
Page 29 |
Page 30 |
Page 31 |
Page 32 |
Page 33 |
Page 34 |
Page 35 |
Page 36 |
Page 37 |
Page 38 |
Page 39 |
Page 40 |
Page 41 |
Page 42 |
Page 43 |
Page 44 |
Page 45 |
Page 46 |
Page 47 |
Page 48 |
Page 49 |
Page 50 |
Page 51 |
Page 52 |
Page 53 |
Page 54 |
Page 55 |
Page 56 |
Page 57 |
Page 58 |
Page 59 |
Page 60 |
Page 61 |
Page 62 |
Page 63 |
Page 64 |
Page 65 |
Page 66 |
Page 67 |
Page 68 |
Page 69 |
Page 70 |
Page 71 |
Page 72 |
Page 73 |
Page 74 |
Page 75 |
Page 76 |
Page 77 |
Page 78 |
Page 79 |
Page 80 |
Page 81 |
Page 82 |
Page 83 |
Page 84 |
Page 85 |
Page 86 |
Page 87 |
Page 88 |
Page 89 |
Page 90 |
Page 91 |
Page 92 |
Page 93 |
Page 94 |
Page 95 |
Page 96 |
Page 97 |
Page 98 |
Page 99 |
Page 100 |
Page 101 |
Page 102 |
Page 103 |
Page 104 |
Page 105 |
Page 106 |
Page 107 |
Page 108 |
Page 109 |
Page 110 |
Page 111 |
Page 112 |
Page 113 |
Page 114 |
Page 115 |
Page 116 |
Page 117 |
Page 118 |
Page 119 |
Page 120 |
Page 121 |
Page 122 |
Page 123 |
Page 124 |
Page 125 |
Page 126 |
Page 127 |
Page 128 |
Page 129 |
Page 130 |
Page 131 |
Page 132 |
Page 133 |
Page 134 |
Page 135 |
Page 136 |
Page 137 |
Page 138 |
Page 139 |
Page 140 |
Page 141 |
Page 142 |
Page 143 |
Page 144 |
Page 145 |
Page 146 |
Page 147 |
Page 148 |
Page 149 |
Page 150 |
Page 151 |
Page 152 |
Page 153 |
Page 154 |
Page 155 |
Page 156 |
Page 157 |
Page 158 |
Page 159 |
Page 160 |
Page 161 |
Page 162 |
Page 163 |
Page 164 |
Page 165 |
Page 166 |
Page 167 |
Page 168 |
Page 169 |
Page 170 |
Page 171 |
Page 172 |
Page 173 |
Page 174 |
Page 175 |
Page 176 |
Page 177 |
Page 178 |
Page 179 |
Page 180 |
Page 181 |
Page 182 |
Page 183 |
Page 184 |
Page 185 |
Page 186 |
Page 187 |
Page 188 |
Page 189 |
Page 190 |
Page 191 |
Page 192 |
Page 193 |
Page 194 |
Page 195 |
Page 196