Traiana to help CCPs connect
22 October 2014 New York
Image: Shutterstock
Traiana has launched Harmony CCP Connect for equities and successfully completed its first trade.
Some of the largest equity broker dealers, including Credit Suisse, J.P. Morgan and Instinet, will automate the central clearing of their over-the-counter equity trades via Harmony CCP Connect and match and clear equity contract for difference (CFD) related hedging trades at their preferred clearinghouse.
Additional banks are also due to join the network over the coming months, which is currently connected to three central counterparties (CCPs)—LCH.Clearnet, EuroCCP and SIX x-clear. The first trade was completed on 21 October between two banks.
Traiana has estimated that participants could reduce settlement costs for over-the-counter equity trades in Europe, the Middle East and Africa by up to $30 million on an annual basis.
“We are very pleased to be a founding member of this initiative; it is an exciting development for the industry that enables electronic matching and CCP netting for bilateral executed transactions,” said Lee Ellmore, global head of securities, foreign exchange and over-the-counter strategic change for Credit Suisse.
“With global markets targeting shorter settlement cycles, this initiative supports our clearing strategy, increases [straight-through processing] on non-exchange flows and reduces settlement cost.”
Roy Saadon, head of Europe, the Middle East and Africa and co-founder of Traiana, commented: “In a period of regulatory change and cost reduction, moving [over-the-counter] equity trades to a centrally cleared model that also provides netting benefits, represents a fundamental improvement to the structure of equities markets.”
The CCP model is intended to reduce counterparty risk, increase transparency and assist in achieving T+2 settlement through trade compression.
Some of the largest equity broker dealers, including Credit Suisse, J.P. Morgan and Instinet, will automate the central clearing of their over-the-counter equity trades via Harmony CCP Connect and match and clear equity contract for difference (CFD) related hedging trades at their preferred clearinghouse.
Additional banks are also due to join the network over the coming months, which is currently connected to three central counterparties (CCPs)—LCH.Clearnet, EuroCCP and SIX x-clear. The first trade was completed on 21 October between two banks.
Traiana has estimated that participants could reduce settlement costs for over-the-counter equity trades in Europe, the Middle East and Africa by up to $30 million on an annual basis.
“We are very pleased to be a founding member of this initiative; it is an exciting development for the industry that enables electronic matching and CCP netting for bilateral executed transactions,” said Lee Ellmore, global head of securities, foreign exchange and over-the-counter strategic change for Credit Suisse.
“With global markets targeting shorter settlement cycles, this initiative supports our clearing strategy, increases [straight-through processing] on non-exchange flows and reduces settlement cost.”
Roy Saadon, head of Europe, the Middle East and Africa and co-founder of Traiana, commented: “In a period of regulatory change and cost reduction, moving [over-the-counter] equity trades to a centrally cleared model that also provides netting benefits, represents a fundamental improvement to the structure of equities markets.”
The CCP model is intended to reduce counterparty risk, increase transparency and assist in achieving T+2 settlement through trade compression.
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