Pre and post-trade processing solution company Traiana has today announced that it is now able to match and affirm FX derivative client trades with LCH.Clearnet Ltd’s (LCH.Clearnet) ForexClear service via its Harmony CCP Connect cross-institution network that connects PBs, EBs and buy-side clients.
With this service, the Harmony CCP Connect intends to provide a comprehensive workflow solution via the Harmony network which can be used for both interdealer and client clearing, including CCP connectivity, trade routing, affirmation, matching, allocation, and reporting for OTC FX options and NDFs.
According to Traiana, this is the first middleware solution to be able to perform this function, following the establishment of direct connectivity with the clearing house in July this year.
Since its inception, Harmony members have been provided with the ability to have a single connection to a messaging hub which ensures that trades can be submitted in the sender’s preferred format and delivered to each recipient in their preferred setup.
A highly complex matter, trade matching and affirmation is a resource-hungry business, with Traiana’s remit encompassing a range of criteria for each transaction, as investigated by Forex Magnates in a detailed insight into post-trade order flow in May this year.
Beyond the basics of price, size and instrument, a broker needs to report on a huge array of details. Such information can include the trade counterparty and on whose behalf the execution was made, whether it is a direct trade or a prime brokered trade, or whether it was executed on an anonymous or disclosed platform.
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With regard to the company’s supporting of FX derivative client cleared trades at LCH.Clearnet, Andy Coyne, CEO of Traiana made a corporate statement today that: “We are extremely pleased to have been the first to match and affirm trades through our link with LCH.Clearnet on the day that the ForexClear client clearing service went live. The success of clearing these first client trades underlines our commitment to help our clients meet their regulatory responsibilities.”
Gavin Wells, CEO of LCH.Clearnet’s ForexClear, further added: “Traiana’s Harmony CCP Connect is an integral part of the clearing workflow. We are delighted with the efficient processing of the first trades through ForexClear’s service for clients.”
Mr. Wells had detailed his professional opinion to Forex Magnates on the importance of correctly matching and dealing with trade data in June, during a discussion panel regarding the Dodd-Frank rulings in which senior institutional FX figures discussed the ramifications of trade reporting and processing once the entire set of rulings had been implemented. “If you are revealing large trades to a public environment it is important to take into account methods of proper calibration,” explained Mr. Wells.
“Bringing in a calibrated system over time is the way to go. There has already been some loss of the data being made transparent, and migrating steadily will mitigate the risk of lost data,” he concluded.
Following on from this, according to today’s announcement by Traiana, market participants looking to clear FX trades under the new Dodd-Frank and EMIR regulations can leverage their existing FX prime broker connectivity together with Harmony CCP Connect’s matching and affirmation capabilities to get direct access to central counterparties (CCPs).
Harmony CCP Connect also provides a gateway to other leading FX infrastructure operators, ensuring participants can use their preferred trading, allocation and confirmation venues with complete interoperability.
The solution supports all proposed US and European clearing rules and workflows, and according to Traiana, aims to simplify compliance for FX clearing firms and their clients.