It is a particular challenge for the data-heavy exchange-traded derivatives market during periods of high volumes and volatility, which has historically lacked a standardized approach to addressing reconciliation issues or provision of timely data to end clients.
Nasdaq has announced it will integrate its strategic clearing platform, Nasdaq Real-Time Clearing, into FIA Tech’s Trade Data Network in a partnership aimed at catapulting efficient data sharing across the global post-trade industry.
To reduce the complexity of post-trade data processing across the exchange-traded derivative market, Nasdaq and FIA Tech have teamed to provide market participants and post-trade service providers with the tools to improve middle and back-office processes including trade-date clearing, give-ups, fee, and commissions management, and help to eliminate duplicative reconciliations across these functions.
Trade data network is crucial with today’s volumes and volatility
Much of the global post-trade network is highly fragmented with a high degree of non-standardized data exchanged between market participants and infrastructure providers.
This has led to a sector characterized by multiple points of reconciliation where trading data and cleared positions are verified across multiple systems, poor information flow between participants, and instances where data is effectively lost in the network. Collectively, it represents a substantial inefficiency and cost to the industry.
It is a particular challenge for the data-heavy exchange-traded derivatives market during periods of high volumes and volatility, which has historically lacked a standardized approach to addressing reconciliation issues or provision of timely data to end clients. Inconsistent standards, a lack of common trade identifiers, and inadequate tools for collaborating and communicating across the industry prevent a coherent flow of data and timely resolution.
Integration will increase standardization and network adoption
FIA Tech’s Trade Data Network combines trade data from buyside, brokers, clearing houses and clearing members into a common framework, creating a shared golden source of clearing activity for participating firms.
The integration will reduce friction and significantly enhance the volume and quality of post-trade data available to FIA Tech’s 8,000+ members while empowering central counterparty clearinghouses (CCPs) using Nasdaq’s clearing platform and end-users with the ability to conduct more reliable risk analysis, operate with greater capital efficiency, and lower overall risk exposure. The functionality will help to substantially reduce systemic inefficiency across the global post-trade network.
Magnus Haglind, Senior Vice President and Head of Products, Marketplace Technology, Nasdaq, said: “As a technology provider to over 20 CCPs globally, Nasdaq has a powerful role to play in addressing systemic inefficiency across the global post trade network. There is a global necessity to upgrade legacy post trade technology platforms, and interoperability must sit at the heart of the new global framework. A consistent operating model for data, systems and processes can deliver substantial benefits to market participants through more efficient use of capital and a more resilient operating model.”
Nick Solinger, President and CEO, FIA Tech, said: “Nasdaq’s integration of its strategic Real-Time Clearing system into the Trade Data Network will increase standardization and network adoption. We are excited to partner with Nasdaq on this initiative to reduce operational inefficiencies.”
