The service has been initially launched for over-the-counter (OTC) foreign exchange (FX) trade, and is expected to be rolled out to other asset classes in the future.
It is intended to remove the manual process of netting between clients by applying an application programming interface to communicate between clients’, banks’ and custodians’ systems.
An automated workflow will also allow for visibility and control around payment preparation for net and gross trades.
According to NEX, around $150 billion is settled every day between clients and dealers, but settlement failure rates are 3 percent.
The netting service should minimise intra-day settlement exposure, reduce settlement fails and provide greater certainty of funding needs.
Joanna Davies, managing director at Traiana, said: “The settlement netting service will allow traders to execute with any bank on any trading venue and enjoy optimised, efficient, automated and consistent post-trade processing from execution through settlement.”
“Settlement netting processes have traditionally been fragmented across organisations and asset classes, requiring extensive manual processing, which does not reflect the way in which the market is moving. By automating the entire netting process via a central hub, we’ve brought an essential tool to the market that will significantly reduce breaks and have a direct impact on costs for our clients.”