CCPs, TRs and SEFs solving the puzzle of multi-participant workflows in FX

The connectivity and workflows required for trading FX products will change and become more complex as a result of the new FX clearing and reporting environment. Frances Faulds talks to providers about what’s in store.

First Published: e-Forex Magazine 55 / Market Infrastructure / January, 2014

The addition of trading on Swap Execution Facilities (SEFs), possible central clearing for some instruments, and reporting of all trades to the newly established trade repositories means that not only the connectivity requirements to trade FX have become more complex, but also that the workflows will need to be re-evaluated for any possible impact. While the new connectivity is fairly straight-forward and can either be built in-house or outsourced to a third party middleware provider, dealing with the added complexity to the workflow is quite a challenge. It requires sourcing the correct trade data, at the right time, managing the new reporting codes and identifiers and dealing with the status and messages coming back from the CCPs and trade repositories. Banks will need new exception management workflows to handle incoming messages from trade repositories and CCPs and in some cases a new internal workflow will be needed to receive automatic updates of reported trades, which is likely to impact existing...continued

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