Advancements in listed derivatives post-trade automation

Abstract

As markets have continued to expand and because globalisation attracts new participants on a daily basis, it has become paramount to create further efficiencies in the post-trade and clearing domain. The complete spectrum of clearing processes can potentially benefit from automation. This set of automated processes includes third-party trade submission, trade management, allocations, position maintenance, physical delivery, margining, settlement, end-of-day reporting and reference data. There is a compelling business case for a front-to-back post-trade solution that removes barriers to information exchange and ensures rapid communication between the clearing house and market participants. Those areas that are not fully automated may become a liability that can affect the overall health of the organism.As global markets bring the world closer together, standardisation has begun to homogenise the protocol on which these interfaces are based. The result should be reduced cost to market participants, because they are able to plug into all major markets cleanly, using a single, standardised protocol, and the benefit to market participants will be exponential as they increase their ability to manage trades and positions in real time and to do so in a cost-effective manner.