Integrated matching and netting platform for FX, derivatives and securities
The Issue
Treasury operations of internationally oriented companies necessitate a large number of legal entities and counterparties, high transaction volumes and complex, diverse treasury and cash management requirements globally.
- Treasury activities often take place in various locations, with a wide variety of departments involved. Confirming, matching and netting of foreign exchange (FX) and money market transactions and of interest-rate derivative confirmations represent a treasurer’s nightmare.
- Foreign exchange transaction more often than not involve, in addition to the plain vanilla transactions, exotic FX options whose complexity make it less and less feasible to handle them manually.
- In this confirmation and matching process, the lack of standardization of formats across banks has created substantial challenges as not every bank is able or willing to accept the same file and field formats. This situation frequently resulted in investments on both sides in order to exchange common formats.
Solution
SWIFT Accord is offering a central confirmation matching and netting application for foreign exchange and money market transactions, and for interest-rate derivative confirmations. Integration into the banking system environment with the Incentage flow manager for SWIFT Accord is key for successful application of SWIFT Accord.
Incentage makes sure that the flow of messages between bank application and SWIFT Accord moves as smoothly and unobstructed as internal message flows. Incentage’s realtime facilities complement SWIFT Accord’s realtime capability in a more than perfect way.
Benefits
- Drastically reduced operating risks for foreign exchange, money market and derivatives
- Central matching and confirmation system for all transactions, whether or not the counterparty to a trade is also an Accord user
- Increasing exotic FX transactions handled in the same STP process
- Potential for integration securities confirmations messages (MT 515)
- All Accord data are stored centrally and are therefore accessible on a worldwide basis
- Archival and audit trail of the entire matching history
