Overview

The requirement to better mitigate risk in the wake of the financial crisis has prompted a significant growth in centralised clearing. The number of clearing houses and central counterparties (CCPs) operating across the financial markets has increased and continues to grow.

The proliferation of clearers, coupled with frequent consolidation among CCPs, has created a challenge for financial institutions that must connect to them, with costs and risks increasing with every different proprietary format and network they need to support.

SWIFT has a vital role to play in the clearing space. Its new Clearing solution combines ISO 20022 messages and the SWIFT network to standardise and streamline communications between clearers and their participants, to the benefit of both.

The Clearing solution supports the following business flows:

• Trade notifications and statements
• Position management
• Margin calls and collateral management
• Settlement management

Benefits

For CCPs

• Standardised, automated communications with clearing members
• Reduced costs and risks
• Reuse of existing SWIFT infrastructure, maximising cost and efficiency savings
• All the value of SWIFT: validation, authentication, guaranteed delivery and reach

For clearing members

• Speedier, simpler and streamlined connectivity to new and multiple CCPs
• Reuse of existing SWIFT infrastructure and standards expertise
• Reduced costs and risks and increased STP