Some of the largest equity broker dealers, including Credit Suisse, Deutsche Bank, Instinet and J.P. Morgan, are already using Harmony CCP Connect to automate the matching and central clearing of their OTC equity contract for difference (CFD) trades at their preferred clearing houses.
The addition of two new banks will lead to further cumulative benefits for the market as a result of increased volumes through the platform. Traiana has shown that overall savings in the equities market could be as high as $30 million per year. This is the result of a combination of effects including reduced volume of trades requiring bilateral settlement, reduced fail trades and reduced borrowing, funding and margin costs as a result of decreased settlement volumes. Harmony CCP Connect plays an important role in reducing counterparty risk and increasing transparency.
“The addition of Barclays and UBS to the platform will bring a tremendous boost to the volume of trades we are able to net and a corresponding saving for all active market participants, not just the two new brokers,” says Laura Craft, Director of Product Strategy for Equity & Fixed Income at Traiana. “By netting trading activity, executing brokers and prime brokers benefit from reduced ticket volumes and a corresponding reduction in settlement costs and risks.”
Many of the world’s largest equity broker dealers are now using Harmony CCP Connect for Equities for matching and clearing equity CFD related hedging trades at their preferred clearing houses. Over 90% of all OTC equity trades are eligible for clearing and Traiana has an over 95% success rate for netting and clearing these trades when both brokers are connected.
Traditionally, the OTC equity market has experienced high error rates as a result of bespoke and labour intensive processing. Harmony CCP Connect for Equities automates the central clearing of OTC equity trades by using an interoperable solution. It is connected to all three pan-European CCPs, namely EuroCCP, LCH and SIX x-clear.
About Traiana
Traiana, Inc. (www.traiana.com) provides global banks, broker/dealers, buy-side firms and trading platforms with services to monitor pre- trade risk and automate post-trade processing of financial transactions in listed and over-the-counter trading markets. Traiana’s solutions and the Harmony Network have become the market standard for post-trade processing of foreign exchange, exchange traded derivatives, fixed income, CDS and synthetic and cash equity transactions. Traiana, an ICAP company, is headquartered in New York and has offices in London, Hong Kong, Singapore and Tel Aviv, and representation in Chicago and Tokyo.
