Getting to the root of settlement fails
Settlement fails and exceptions are costing the securities industry billions in operational overheads and fees. And as market participants are all-too aware, this is only intensifying under CSDR’s Settlement Discipline Regime and shortening settlement cycles globally.
But it doesn’t have to be this way. Increased transparency and tracking across the securities transaction lifecycle can help firms detect trades at risk of failing and resolve them before they become a problem.
SWIFT Securities View does more than just empower our customers to identify and rectify discrepancies in settlement transactions. It sets the blueprint and foundation for a new industry standard to radically transform the industry.
Introducing SWIFT Securities View
Together with our community, we’re developing a new service, SWIFT Securities View, that enables market participants to track securities transactions from end-to-end throughout their lifecycle. Through increased transparency, we aim to help you reduce operational risk and costs, improve straight-through processing and boost settlement efficiency.
SWIFT Securities View will leverage the Unique Transaction Identifier, which already exists in the securities industry as part of the ISO stable (ISO 23897:2020). Currently in pilot mode with a group of leading financial institutions, we expect the service to be available to the wider community in early 2023.
How it works?
SWIFT Securities View aims to give you the data and tools you need to improve visibility and understanding of your securities settlement transactions. It will initially leverage the settlement data carried in ISO 15022 MT messages, including the use of the UTI, which can already be exchanged between counterparties today.
An early warning feature will give users advanced notice of issues that are typically detected later in the settlement chain, including early detection of any discrepancies between buy and sell instructions. Organisations and their users will be able to integrate the service via multiple channels including notifications, APIs, messaging and GUIs.
Reduced operational risk and better settlement efficiency
Through end-to-end transparency and comparison features, you can react fast and efficiently to detect and resolve exceptions and avoid or limit settlement penalties.
Driving digitalisation and facilitating interoperability
Enables better connectivity between users and makes it easier to transmit and track transactions between traditional and next-generation technologies.
Provides a mutual historical view on transactions for all settlement parties, enabling faster and better decision-making to correct settlement exceptions.
Start implementing the UTI
The most-used standards for trade, settlement and reconciliation, whether in ISO or FIX format, already include fields that support the communication and exchange of UTIs between systems and counterparties. And today some key trade matching platforms are already capable of generating the UTI and sharing it with securities buyers and sellers.
While SWIFT Securities View can provide some complementary data and incremental improvements to users that have not yet integrated the UTI, once the UTI is adopted it drives automation as well as consensus between parties.
For the UTI to become the norm, it’s vital that all parties involved in a securities settlement transaction use the same identifier and that market practices are clear and well defined. This is a primary area of focus for SWIFT and our securities community.
Learn more about the benefits of the UTI and download the guidelines for implementing and communicating the UTI.
We’re collaborating with a group of major institutions on this service, including:
|ABN Amro Clearing Bank||
|BNP Paribas||J.P. Morgan|
|BNY Mellon||Northern Trust|
|Citi (Securities Services and Global Markets)||Optiver|