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Meritsoft Launches New Trade Tracking and Exception Manager Solution for Enhanced Settlement Efficiency

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Meritsoft, the Cognizant company specialising in post-trade automation, has unveiled its new Trade Tracking and Exception Manager (TTEM) solution, designed to offer comprehensive insights into settlement operations for financial institutions. The launch aims to improve operational resilience and efficiency for market participants, minimise settlement failure rates, and elevate client service and reporting standards.

The cross-asset class TTEM platform offers near real-time updates on trade matching and settlement status, allowing operational teams to swiftly identify and address trades at risk of failing before market deadlines. Customisable operational dashboards display settlement risk profiles and Red-Amber-Green (RAG) status, enabling prioritisation based on predefined risk profiles and priorities.

“The TTEM allows firms to consolidate their equity andfixed income trades, with real-time updates on SWIFT statuses, so they can take pre-emptive actions to avoid trade failures,” says Daniel Carpenter, Meritsoft’s CEO, in conversation with TradingTech Insight. “Users can prioritise tasks by identifying trades at risk of failing and promptly address the issues. The TTEM facilitates a consolidated view, or a ‘single pane of glass,’ from an operations perspective, helping users focus on critical areas.”

Regarding fail resolution, the process essentially involves communication, says Carpenter. “While this may sometimes be internal, it predominantly requires external engagement with counterparties to rectify settlement instructions or other issues. TTEM offers a streamlined messaging system that enables users to communicate with counterparties in the necessary formats. It then allows for the exchange and integration of responses, thereby acting as a hub for communication consolidation.”

The solution is positioned as a comprehensive tool for managing the trade settlement lifecycle, facilitating continuous performance improvements. It is also compatible with Meritsoft’s CSDR Manager and Interest Claims Management solutions, offering a holistic approach to handling penalties for in-scope trades and issuing interest claims for failed trades, respectively.

“TTEM is also unique in that it can be fully integrated with another of Meritsoft’s systems for managing claims in the event of a trade failure,” says Carpenter. “It calculates the resultant interest, facilitates the charge-down process, and communicates the relevant details to the counterparty. It can similarly be integrated with the firm’s tool for processing CSDR penalties for in-scope trades. Subsequently, TTEM assists in the recovery or payment of funds, ensuring that the amounts are matched and confirmed.”

One of the key features of the TTEM solution is its predictive AI module, which employs advanced machine learning algorithms to forecast the settlement status of trades. This is integrated with the platform’s risk profiling data to enhance dashboard functionalities for risk management and operational prioritisation. Additionally, the solution offers configurable automated workflows for exception management and counterparty communication, and users can enable their clients to oversee their own trade activity via a client portal.

“The AI component is focused on the prioritisation of tasks,” says Carpenter. “With a plethora of data and a steady influx of SWIFT messages, the system has to discern which items require immediate attention. The AI achieves this by analysing historical patterns to forecast potential outcomes and establish these priorities. By standardising these data sets, we are able to employ AI-driven algorithms to make predictions effectively.”

Leveraging Meritsoft’s recently launched next-generation technology platform, the TTEM is engineered with a cloud-ready, API-first architecture to ensure scalability and interoperability across high-volume, real-time transactions.

This strategic launch aims to equip firms with the necessary tools to navigate future market structure and regulatory changes, in particular the shift to T+1 settlement in North America, while enhancing resilience in times of increased market volatility.

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