- Utilize the repository across all markets and products
- Centrally manage the settlement instructions process across organization
- Receive email notifications alerting counterparties of all instruction updates
- Conveniently store history of all instructions and changes
- Facilitate callback process electronically
- Instructions can be incorporated into Settlement
- Comparison allowing clients to effectively compare contract details
The volume and complexity of data required to comply with SFTR will prove challenging in an environment where many companies already face signiﬁcant technology budget constraints.
Market participants have options on how to meet their SFTR reporting requirements, including compiling and processing the information on their own from disparate internal systems or outsourcing the effort to a vendor. Yet both will require significant investment and process changes that will be both difficult to implement and costly for market participants.
EquiLend offers the industry’s simplest solution. Our unique position in the market—with existing links to market participants to our industry-leading trading, market data and post-trade services—means we already capture much of the information required by SFTR. That enables us to create the unique transaction identifier (UTI) immediately either at the point of trade or during the post-trade comparison process.
Furthermore, the ESMA consultation paper on draft RTS and ITS, ESMA/2016/1409, confirms that timestamps remain a required field, but a level of tolerance can be applied. The proposal is that several minutes can be applied to a timestamp field, such as execution timestamp. EquiLend provides a timestamp for all activity that clients undertake across the platform.
As a result of EquiLend’s technological capabilities, industry expertise and unique position in the securities finance market, we are able to offer a scalable, cost-effective, light-touch solution—the simplest solution in the market to meet the demands of SFTR.
The Securities Finance Transaction Regulation (SFTR) aims to reduce risks by improving transparency in securities financing markets and forms part of the EU’s response to the policy proposals issued by the Financial Stability Board (FSB) in August 2013. It seeks to impose a series of conditions and rules and will require counterparties to report details on trades and collateral (including reuse) to a registered trade repository (TR). Managers of UCITS and AIFs also will be required to disclose the details of the use they make of SFTs and total return swaps.
While the final text has not been concluded, and some relaxation of requirements has been proposed in the Level 2 text, the main challenge for market participants revolves around the content and timing of the reporting requirements for trades and collateral. The reporting requirement is dual-sided and requires the provision of a unique transaction identifier (UTI) for each trade and a legal entity identifier (LEI) for their counterparts in the trade.
A mandatory reporting format has been suggested, which would require the inclusion of a comprehensive series of details throughout the lifecycle of the trade. Market participants will be confronted by the need to track, manage and report a large volume of data, some of which may be captured by upstream or downstream systems, creating a potentially costly requirement to upgrade current systems or build out to external sources.
As a front-to-back service provider, EquiLend is in a unique position as the best-placed provider in the securities finance industry to capture and create a UTI either at point or during the post-trade comparison process, providing the simplest solution to a complex problem.
We are working with industry bodies, clients, tri-party agents and TRs to provide an automated, consolidated, scalable solution that removes the necessity for manually intensive intervention from clients and provides transparency throughout the process.
NEXT GENERATION TRADING
Next Generation Trading (NGT) is a multi-asset class trading platform for the securities finance marketplace. Accessed through NGT’s intuitive, Web-based user interface or via full automation using our proprietary messaging protocol, NGT offers access to global securities finance trading to firms of all sizes. With tens of thousands of trades conducted on the platform around the globe each day, NGT offers unparalleled liquidity in the securities finance market. NGT’s strategic features increase trade-level transparency, improve workflow automation and generate efficiencies market wide.
- Negotiation tools with real-time bid/offer workflow
- Trading on screen or via automated messaging
- Straight-through processing for trade decisions and bookings
- Targeted Availability (TA): up-to-date, executable inventory
- Indications of interest (IOI): market discovery tool
- Borrower-to-lender and broker-to-broker trade flows
- Flexible non-cash collateral communication
- Streamlined static data setup and ongoing maintenance
90 firms using NGT globally each day
NGT users are based in 30+ locations around the globe
Assets domiciled in 50+ markets traded on NGT
$39bn notional on average traded on NGT each day
$55bn notional: single-day record traded on NGT on September 25, 2018
Unified Comparison lets you interact with your post-trade system in completely new ways. Its flexible, automated workflow management will liberate break resolution, letting you choose precisely what you want to view and how you want to communicate with your clients. Unified Comparison is the nucleus for post-trade lifecycle management and a gateway into all the other PTS products available within EquiLend. By connecting to Unified Comparison, you will reduce downstream lifecycle noise and be positioned to adhere to future regulatory initiatives.
HOW IT WORKS
Intra-day One File connectivity allows for fast data transfer, ensuring you are instantly connected to all your necessary content
Unified Comparison is incredibly content rich, but with its dynamic filtering it allows you to focus on your key risk initiatives effortlessly. It aggregates the data so that you can get a more complete and succinct picture of all your client portfolios
What is the best way to improve your settlement rates or reduce your P&L issues? Unified Comparison helps you structure your workload. Priority columns direct you to fix your most important breaks first
- Supports all equity and fixed income products
- Reconciles global pending trades to recognized industry standards
- Customizable filters and columns catering for individual preferences
- Multi-search capability to allow easy access to relevant data
- Ability to normalize non-vanilla activity
SETTLEMENT INSTRUCTIONS REPOSITORY
The Settlement Instructions Repository offers an automated service for central storage of all settlement instructions. It is a product agnostic service which can facilitate the sharing of instructions across all markets.The flexible upload functionality and automated email alert notifications allow users to efficiently manage their instructions process. Managerial authorization of instructions and changes ensure that instructions are tracked for data integrity and compliance. Settlement Instructions Repository also integrates into EquiLend's Settlement Comparison service, enriching trade level details to your pending loans and returns.
HOW SETTLEMENT INSTRUCTIONS REPOSITORY WORKS
- A client uploads settlement instructions into the repository
- EquiLend generates an email and approved users authorize instructions
- Upon approval, EquiLend generates an email to notify counterparties of new instructions
- Counterparties review instructions, update their proprietary system, and amend EquiLend status to “Confirmed”
- EquiLend generates an email notification to both clients confirming the instructions
- Instructions are managed in the repository for easy access and research
Contract Comparison allows users to compare contract terms for US and non-US equities and fixed income contracts, identify discrepancies, and view and reconcile the breaks online. Comparisons can be performed on loan contracts, returns, recalls, and collateral records. Contract Comparison facilitates the Mark-to-Market process and the billing process by enabling users to identify and reconcile differences early in the life cycle of a trade.
HOW CONTRACT COMPARISON WORKS
- Open contracts or contracts pending settlement are submitted by both counterparties at a pre-agreed time
- Corresponding counterparty records are compared and discrepancies identified
- Results are returned immediately after the matching algorithm is complete
- Counterparties reconcile breaks by taking actions and using comments on the browser
- Counterparties take appropriate actions in their proprietary systems to correct breaks
- Contracts can be compared even if not traded on the EquiLend platform
- Comparison process can run at one of several predetermined times or throughout the day
- Corporate actions can be reconciled, or managed to avoid breaks by the Security Linker or Exclude Security functions.
- Flexible exception rules accommodate differences in counterparties’ proprietary systems
- Customizable tolerances eliminate false breaks due to rounding and small monetary differences
- Security level aggregation with the ability to see lot level details
- Customizable browser shows relevant fields in any order
- A sophisticated matching algorithm ensures that breaks appear cleaner and more succinct
- Public and private comments provide the ability to record notes on a break
- Persistent actions and comments allow users to track break age and history
- Customizable management reporting to review break trending and aging
- Available through XLS file upload via the browser
RETURNS & RECALLS
The EquiLend Returns & Recalls services provide an efficient, automated way for borrowers and lenders to send return or recall notifications.
HOW RETURNS & RECALLS WORK
- A counterparty initiates a return/recall for a specific contract using a unique EquiLend ID, or may issue a more general return/recall for one or more securities
- The recipient may acknowledge the receipt of a return/recall via the EquiLend screen or through messages integrated into their prop system
- EquiLend provides reporting and tracking capabilities to monitor return/recall status online
- Initiate returns/recalls via the browser, XLS file uploads or messaging
- Set system to automatically acknowledge the return/recall or have active control
- Ability to bilaterally agree on customized cut-off times by market
- Using an EquiLend ID, initiate a return/recall that is contract specific for both parties
- Through a direct link to the DTCC ARMS hub, EquiLend clients can recall U.S. securities from non-EquiLend clients with whom they have transacted
- Ability to return or recall all global equity and fixed income securities