LEADER
makes a lot of sense for participants to use the SWIFT network to carry that data into first MarkitServ, which will then send it on to a CCP.
Joe Halberstadt, head of FX and Derivatives Markets at SWIFT, says that as clearing is now being mandated for all participants using NDFs, FX options at a later stage and in-future perhaps even forwards, the SWIFT network has the broad reach needed for getting data into clearing.
He says: “As a front end to multiple CCPs, MarkitServ acts as a single channel for getting NDFs into the clearing system but this needs extension for those regional banks and buy-side firms that have not built connectivity to MarkitServ. We have the data, wide connectivity to many thousands of organisations directly connected to the network and using it for FX messaging and we can feed this into the CCPs where required.”
Joe Halberstadt
“We have the data, wide connectivity to many thousands of organisations directly connected to the network and using it for FX messaging and we can feed this into the CCPs where required.”
derivatives trades and its innovative GUI dashboard shows the current status of transactions in process. Tippell says: “We send messages, in real-time, to and between participants advising of the cleared, and reported, states of FX transactions, enhancing operational risk management and process efficiency around outgoing – and incoming – trade flows.”
Clearing will add a wholly new level of complexity to the FX front, middle and back office and MarkitSERV has invested heavily in making its service as seamless as possible. Over the past 18 months it has worked collaboratively with the FX industry to understand the new workflows and build a platform that is operationally effective and efficient. “Tese changes create uncertainty and add further complexity in terms of managing margin and collateral and assessing the overall impact on risk. We are taking the pain out of managing connectivity and the operational processes around managing new trade flows,” he adds.
SWIFT
It is no surprise that SWIFT is getting involved in the new processing procedures and services needed for FX clearing. Te financial messaging network carries post-trade information for FX and FX derivatives and as the data is already contained in the messages it
30 | july 2012 e-FOREX
FX is a very large business area for SWIFT. Te FX market is evolving in different ways – with clearing and trade reporting – and SWIFT wants to ensure its portfolio of services evolves along with the market and its remains relevant to its users.
SWIFT intends to provide a similar service for FX options once the challenges around the model are overcome. For FX forwards, Halberstadt says there very different view in the market. Some of the buy- side use some very long-dated forwards that might cleared, but much of the sell-side is not keen on clearing forwards, because of the cost of the collateral, and it remains to be seen how this develops over time.
For Halberstadt, differentiating the SWIFT offering is very straight-forward, it is about building on what is already in place to ensuring minimal effort to enable NDF clearing by using existing confirmations. Te partnership with MarkitServ is a huge step forward in enabling regional and tier two banks to simplify how they can get trades into the CCPs as most are sending MT300 anyway to confirm NDFs and MT300 messages for spot and forwards. Now they just have to identify the CCP and it will be sent automatically to clearing, and possibly to the trade repository for reporting.
With so much change coming, cost and convenience will be high on the agenda for FX market participants and if risk mitigation can be coupled with these two factors and even drive down costs further in the long term it is far more likely to lead to a wider-scale adoption, perhaps even above and beyond what is mandatory, creating a wholly new infrastructure for the FX industry.
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