Shortening the Securities and Cash Settlement Cycle

Bringing efficiency to the entire trade lifecycle is the key to decreasing risk. With increased cross border trade activities, the post trade process continues to be complex and challenging for investment firms due to lack of harmonization in market practices. Despite technology advances and business process improvements, there are inefficiencies in the settlement process leading to trade and settlement failure. The cost of stock borrowing to avert the risk of trade failure has increased because of the exponential increase in settlement failure. Many firms cite inaccurate settlement and account instruction (SI) data as the most significant reason for failure, followed by the deliberate failure to settle by counterparties and mismatches between cash and securities cycles. Both buy side and sell side firms are looking to mitigate counterparty and operational risks as well as reduce costs.