For many years Trax has been an established mechanism with which to match trades on trade date and reduce risk. Over time as risks have inherently grown, it has become even more pertinent to manage exceptions as close as practically possible to execution. We recommend that, as a best practice, firms should send their instructions to Trax within 15 minutes of trade execution so that exceptions can be identified and addressed immediately. This would give as close to a real-time electronic match as possible.
With this established as the goal, the following fields should be considered mandatory when matching trades on T0 using Trax.
By establishing all the details that are required for efficient settlement and agreeing not just to the key economics, but also the settlement account details, our processes help you to mitigate your risk. This is from both the perspective of trading risk, as well as the subsequent reputational damage that can ensue from an inefficient processing model. Wherever possible, instructions should also be sent to the (I) CSD on T0 to streamline the current manual operational exception processing.
Shorter settlement cycles demand that more action needs to be taken on trade date. This can be categorised as:
For the market to move forward with increased demands around liquidity, funding and regulation, it is necessary that the infrastructure to support this is both automated and scalable. Trax is committed to working with the industry to enhance and develop its already well-established trade matching platform across the Fixed Income Cash and Repo markets, and to respond to any additional demands that arise from the market.
1 Denotes that the field is only applicable for Secured Financing Transactions (Repo, Buy Sell Back).
2 Although Repo rate / benchmark is not required to match a trade at the (I)CSD, it should be considered a best practice to agree those details at the point of trade date affirmation process.