With the US markets’ adoption of T+1 settlement looming, trade automation platform Xceptor has teamed up with corporate collaboration specialist Taskize to streamline the trade affirmation process. The integration of the Xceptor Confirmations solution with Taskize’s inter-company workflow platform is aimed at helping firms to orchestrate affirm, confirm, and dispute resolution with their counterparties as they grapple with the impending shortening of the settlement cycle.
From May 2024, all securities trades in the US will be required to settle one day after the transaction, in a shift from the current T+2 cycle. The move is aimed at reducing settlement risk while also easing liquidity, margin and collateral requirements.
The impact of the change will be felt globally as many financial institutions trade or hold US securities as part of their portfolio of service offerings. Furthermore, other jurisdictions outside of the US are considering similar moves.
But while the shift to T+1 poses operational challenges within custody and settlement groups, it also presents the opportunity for firms to automate or enhance previously manual and inefficient processes. To address this opportunity, Xceptor and Taskize aim to supply financial institutions and energy firms with improved counterparty experiences and significant operational efficiencies.
Boosting operational efficiency while lowering risk and costs, the partnership provides a solution for Xceptor customers who face T+1 and other regulatory pressures. It also addresses the fact that 5% of unlisted securities trades fall into dispute and 40% require manual chasing or affirmation.
The partnership combines Taskize’s ability to heavily reduce the volume of operational emails and provide greater clarity and real-time management information, with Xceptor’s platform for accurate and rapid affirmation, delivery, and exchange of trade data. Through this joint proposition, companies can access a modern and streamlined process to manage and audit various correspondence methods to drive trade volumes, enhance efficiencies within large confirmation analyst teams, and reduce the risk of financial loss.
According to Michiel Verhoeven, CEO at Xceptor, “Historically, financial services and energy firms have risked financial loss through unsettled trades, experienced a lack of auditability and transparency across correspondence with counterparties, and spent costly analyst time on low value activities such as chasing. This integration with Taskize addresses these challenges in multiple ways. By providing counterparties with a better user experience, there is more scope to drive traffic to the business, reduce costs and risk, and confirm trades even where there is no common data structure.”
Philip Slavin, Taskize CEO, added: “Email correspondence is infamously hard to manage and audit. Taskize meets this challenge head on and provides a purpose-built consolidated solution that retains the useful elements of email and removes all the problematic. It provides a single-issue alternative to multi-thread posts which are often hard to track, while the Taskize Smart Directory dynamically allocates queries, understanding and learning who is best suited to resolve each one.”
Says Slavin: “With counterparties streamlining all communication into this real-time trade affirmation service they can affirm on T+0, thereby drastically reducing the risk of financial loss from economic breaks on complex trades that currently appear at T+3. Moreover, in instances where a break has led to trade failure, the supply of evidence of all relevant conversations acts as invaluable analysis for assessing whether full preventative action was taken. Ultimately, it means companies can continue leveraging Xceptor’s tools and interface, while they and their counterparties benefit from Taskize’s collaboration and resolution workflow technology.”
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