Please tell us a little about the various market participants who make up the TradeNeXus ecosystem.
TradeNeXus is an award-winning post-trade FX and money markets platform for asset managers. Our ecosystem consists of more than 400 global asset managers across 190,000 funds interacting with over 70 banking groups and 800 custodians. Our ecosystem also integrates important financial market infrastructure providers such as CLS and LCH.
Why did you decide to build this community?
The community is built to drive efficiencies and add value across clients’ workflows in post-trade FX. Post-trade FX remains a fragmented market with many bespoke and legacy processes, and our core product brings together clients and their counterparts to drive consistency, STP and minimise costs. We are focussed on innovation, and continue to invest in new features and ideas as the growing need for automation, data-driven decision making and simplicity continues to be key drivers in post-trade FX.
We have been at the heart of FX post-trade for over 20 years, and we continue to see growth in volumes and clients, which is testament to how the industry values our product.
What are the core services and functionality that TradeNeXus offers?
TradeNeXus’ core functionality is trade matching, confirmation and settlement messaging for foreign exchange (FX and FXO) and money market transactions. The platform offers consolidated multi-counterparty view of post-trade activities, including exception-based confirmation management workflows. SWIFT messaging is a core component of TradeNeXus and the platform automatically enriches custodial SWIFT messages with broker SSIs. TradeNeXus settlement workflow supports Gross, Net and CLSSettlement which is facilitated through user tailored rules to determine settlement method. Net settlement figures are also agreed on the platform between our clients. Our platform provides customisability to meet unique client needs, whilst maintaining a consistent workflow for both asset managers and banks.
In what ways is the shifting regulatory environment continuing to put increased pressure on buyside firms, especially asset managers, to seek more effective clearing and optimization workflow solutions?
The FX industry has been recently focused on the upcoming T+1 securities settlement change in US and Canada effective May 2024. Firms have been preparing their organisation to ensure they continue to achieve timely execution, undertake post-trade workflows and settle on a timely basis in this compressed settlement cycle. With less time to settle trades, global firms will need to improve their processes including simplification and automation of their FX processes to avoid any settlement issues. We have seen an increase in adoption of our CLSTradeMonitor partnership product to provide clients with more transparency on the settlement process.
In addition to T+1, Standardized Approach to Counterparty Credit Risk (SA-CCR) is now in force with majority of the global banks, and it continues to have an impact on buy-side clients through the need to actively manage portfolio exposures, availability of credit, and execution prices. Buy-side firms are starting to take more active steps in post-trade to manage their exposures through portfolio optimisation by undertaking compression, rebalancing or clearing.
You have worked hard to make your solutions seamless for clients. What advantages does that have, particularly for firms that want to adopt your add-on services?
TradeNeXus’ simplicity is its strength. Clients who utilize TradeNeXus today can opt into our add-on services modularly and continue to benefit from a consolidated dashboard and workflow to manage all their post-trade activity. This includes leverage existing account setups, integration workflows, and rules engine which will minimize the uplift required for clients to adopt. This speeds up time-to-market and reduces training and resources required.
Please give us some examples of the collaborative work you have recently been undertaking with other organisations which has helped you to expand TradeNeXus beyond a matching and messaging platform.
In 2023, TradeNeXus collaborated with State Street’s StreetFX to deliver a T+1 partnership solution with DTCC. By connecting to DTCC Institutional Trade Processing (DTCC-ITP) and its central trade matching platform, CTM®, StreetFX can automatically execute the required FX trade necessary to fund the purchase/sale of related securities transaction. Once the FX trades are executed, they will flow through to TradeNeXus for straight-through-processing for post-trade workflows, serving as a potential solution around T+1 considerations. This initiative was recognised in the FX Markets Asia Award 2024 as TradeNeXus and StreetFX was awarded “Best bank for post-trade services”.
TradeNeXus and StreetFX have recently won “Best bank for post-trade services” in the FX Markets Asia Award 2024
In recent years, TradeNeXus has also collaborated with market partners to launch new joint offering including CLSTradeMonitor integration, LCH clearing connectivity workflows, and trade optimisation workflows with Capitolis, all accessible within the TradeNeXus dashboard.
What are your plans for growing your portfolio of post trade FX services and solutions this year?
The process of netting in FX outside of CLS continues to be fragmented causing manual work or issues in settlement. TradeNeXus has created a consistent workflow for netting, and will be further automating the netting process through new messaging types that banks can systematically reconcile and approve. This will reduce issues and improve time to settlement.
Additionally, TradeNeXus will go live with new features to improve matching and identification of CNH and onshore CNY transactions. By introducing these standards, clients who opt in can benefit from higher STP and lower risk around misidentification of these trades. Finally, TradeNeXus will be enhancing our reporting suite to introduce enhanced broker KPI reporting. This will allow clients to assess their relative broker performance in post-trade, allowing parties to identify common themes and issues for improvement.
How much more innovation can we expect to see from TradeNeXus in the future to ensure it continues to be at the centre of the post-trade ecosystem?
TradeNeXus will continue to invest in new features that can add value to the post-trade ecosystem. In the drive for greater automation and market structure changes like T+1, there are significant opportunities to re-look at existing FX processes and improve on them. TradeNeXus constantly engages with its clients and partners to improve its service.