SWIFT announces game changer: SWIFT Securities View to launch in 2023

Rick Steves

“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, just as SWIFT gpi continues to do for cross-border payments.”

SWIFT has announced the successful pilot of SWIFT Securities View, a new capability that significantly increases transparency in post-trade processing and helps prevent costly settlement fails.

The pilot included the participation of ABN Amro Clearing Bank; BlackRock; BNP Paribas; BNY Mellon; Citi (Securities Services and Global Markets); Credit Suisse; Euroclear; Euronext; HSBC; J.P.Morgan; Northern Trust; Optiver; Pershing; and SEB.

Service addresses lack of visibility after a securities transaction

SWIFT Securities View addresses one of the biggest challenges in the securities industry and will be available for broad adoption in 2023.

The new service addresses the lack of visibility after a securities transaction takes place, which means that currently there is no way of tracking all the steps in its lifecycle across multiple intermediaries, increasing the risk that a security may not be in the right place at the time of completion.

This leads to settlement fails that add operational costs of some USD 3 billion a year for the industry as well as regulatory penalties such as those introduced by Central Securities Depository Regulation (CSDR) in Europe earlier this year.

SWIFT Securities View allows participants to take pre-emptive action

Giving market participants a clear view of all the steps in the settlement journey and enabling them to identify trades at risk of failing, including early detection of any discrepancies between buy-sell instructions, SWIFT Securities View allows participants to take pre-emptive action.

The service leverages an ISO-standard Unique Transaction Identifier that links messages related to the same securities flow, enabling automated tracking of both sides of the transaction by all market participants involved, similar to the tracking of a package via a postal delivery service.

SWIFT is encouraging universal adoption of the transaction identifier to achieve standardised data use across the post trade lifecycle. This will bring increased transparency to securities transactions, help reduce risk, and support innovative new services.

SWIFT Securities View sets blueprint for new industry standard

Vikesh Patel, Head of Securities Strategy, SWIFT, commented: “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, just as SWIFT gpi continues to do for cross-border payments. Our early pilot results show this potential and further strengthen our mission of making transactions instant and frictionless, across all industries.”

Steve Wager, Executive Manager, Head of Direct Markets Management, BNY Mellon, said: “The UTI adoption by the industry could facilitate earlier matching which is key to timely settlement especially with trade settlement cycles shortening across the Globe.”

Jeff King, Head of Core Custody Product, Citi Securities Services, said: “With the rollout of CSDR in Europe and the planned move to T+1 in Asia and the US, it is becoming increasingly important to ensure settlement efficiency and having transactions match and settle on time. The inclusion of the Unique Transaction Identifier within the settlement lifecycle data communication and the adoption of SWIFT’s Securities View Service within the industry facilitates heightened transparency earlier in the settlement lifecycle allowing matching issues to be discovered higher up the settlement chain rather than waiting on matching updates to come back from CSDs and market infrastructures.”

Olivier Grimonpont, Managing Director, Product Management – Market Liquidity, Euroclear, said: “Euroclear consistently focuses on improving operational efficiency in the post trade space and helping our clients reduce settlement fails. We were pleased to participate in the pilot, which enabled the market to test the potential of adopting a UTI to improve transaction lifecycle visibility.”

Pierre Davoust, Head of CSDs, Global Primary Markets and Corporate Services and Post Trade, Euronext, said: “At Euronext Securities we are continuously looking into ways that enable our clients to improve their daily business. We are pleased to support this important initiative that helps the industry to strengthen the settlement processes and reduce fails.

Paul Baybutt, Global Head of Middle Office for Securities Services, HSBC, said: “We’re pleased to participate in this SWIFT pilot. Wider adoption of the Unique Transaction Identifier should improve visibility for market participants to identify transactions that might be at risk of failing and address potential settlement issues quicker and even before they occur. Expanding the use of UTIs should therefore make it more efficient for service providers, such as ourselves, to respond to client queries about the status of their transactions – which is ever more important with the implementation this year of the Settlement Discipline Regime.”

Russ Stamey, Senior Vice President, Asset Servicing, Northern Trust, said: “We applaud SWIFT Securities View as another step toward full transaction transparency, enabling more efficient securities settlement and more control in the post-trade space.”

Edward Monrad, Head of Market Structure, Optiver said: “Critical to the health of financial markets is a well-functioning and reliable post-trade process. By seeking to increase transparency and efficiency around settlement, SWIFT’s Securities Tracking Pilot is making an important contribution toward this very goal. The UTI has the potential to substantially improve the OTC settlement process and reduce costs by allowing parties to a trade to easily find out where and how other parties are instructing in case of mismatches. Optiver is pleased to be participating in this pilot and looks forward to widespread adoption of the UTI.”

Read this next

Metaverse Gaming NFT

DCentral Miami brings together all of Web3, NFT, DeFi, Metaverse

The world’s biggest Web3 meeting entitled DCENTRAL Miami is set to take place November 28-29, featuring a lineup of some of the biggest and most influential names in the blockchain space.

Digital Assets

Crypto ban expands across UK banks as Starling joins ‎crackdown

UK digital bank Starling has banned ‎all customer payments related to cryptocurrencies, another blow for the crypto traders ‎who recently saw a sizable number of banks deciding not to ‎finance the wobbly asset class.‎

Interviews

Markets Direct at FIA EXPO 2022: Traders know what they want from brokers

The FIA Expo 2022, one of the most prestigious events within the global derivatives trading industry, took place in Chicago on 14 & 15 November.

Interviews

FIA Expo 2022: TNS addresses public cloud limitations with hybrid infrastructure

November is the month of the FIA Expo, one of the largest futures and options conferences in the world, bringing together regulators, exchanges, software vendors, and brokers in one place: the Sheraton Grand Chicago Riverwalk. 

Retail FX

Italy’s regulator blacks out Finance CapitalFX, MFCapitalFX

Italy’s Commissione Nazionale per le Società e la Borsa (CONSOB) has shut down new websites in an ongoing clampdown against firms it accuses of illegally promoting investment products in the country.

Retail FX

Suspected leader of Honk Kong ramp-and-dump scam appears in court

A leader of a sophisticated ramp-and-dump scheme made his first court appearance in a Hong Kong court today, charged with market manipulation and various criminal offences. The case stems from an earlier joint operation of Hong Kong’s financial watchdog, the Securities and Futures Commission (SFC), and the local police. 

Institutional FX

Cboe’s James Arrante discusses growing demand for fixed income, FX algo

We caught up with James Arrante, senior director of FX & US treasuries product and business management at Cboe Global Markets, to uncover emerging trends in the FX and fixed income markets and learn more about the bourse operator’s recent initiatives.

Retail FX

Eurotrader acquires UK broker Petra Asset Management

Eurotrader Group has formally entered into the UK market with the acquisition of FCA-regulated broker, previously named Petra Asset Management Ltd. The new entity operates under the brand name Eurotrade Capital Ltd.

Inside View, Retail FX

The Game of Chess Continues – OPEC, China and the Oil Market

Over the past decade, the US has been complaining about the amount of power which the BRIC group, and specifically China, has on the global economy. BRIC stands for Brazil, Russia, India and China; these were the world’s fastest growing economies. Only in the past 10 months, the US has turned their attention toward OPEC due to the prices of fuel. Nevertheless, China seems to have a strong influence even over the price of crude oil.

<