Next Generation Trading

NEXT GENERATION TRADING


 

Next Generation Trading (NGT) is a multi-asset class trading platform for the securities finance marketplace. Accessed through NGT’s intuitive, Web-based user interface or via full automation using our proprietary messaging protocol, NGT offers access to global securities finance trading to firms of all sizes. With tens of thousands of trades conducted on the platform around the globe each day, NGT offers unparalleled liquidity in the securities finance market. NGT’s strategic features increase trade-level transparency, improve workflow automation and generate efficiencies market wide.


STRATEGIC FEATURES
  • Negotiation tools with real-time bid/offer workflow
  • Trading on screen or via automated messaging
  • Straight-through processing for trade decisions and bookings
  • Targeted Availability (TA): up-to-date, executable inventory
  • Indications of interest (IOI): market discovery tool
  • Borrower-to-lender and broker-to-broker trade flows
  • Flexible non-cash collateral communication
  • Streamlined static data setup and ongoing maintenance

Post-Trade Suite

POST-TRADE SUITE

SFTR Solution

EquiLend offers a scalable, cost-effective, light-touch solution—the simplest solution in the market to meet the demands of SFTR

EquiLend Exposure

Designed not only to help clients maximize their collateral but also streamline and enhance the underlying borrow/loan settlement process

Unified Comparison

Flexible, automated workflow management—the nucleus for post-trade lifecycle management

Settlement Instructions Repository

Automated service for central storage of all settlement instructions

Contract Comparison

Compare contract terms for all global equities and fixed income contracts, identify discrepancies and view and reconcile breaks

Returns & Recalls

Allows borrowers to automatically return assets borrowed through EquiLend or using another trading method

ALD

Provides secure and timely transfer of principal loan data as well as a facility for approving underlying principals

Dividend Comparison

Easily compare manufactured dividend claims and transmit pre-advice for agreement on payment and reconciliation terms

Billing

Allows clients to post electronic bills to all counterparties, whether or not they are an EquiLend client

Mark-To-Market Comparison

Compare marks using customizable tolerances that can be adjusted based on collateral currency and mark amount

Trade Match

Provides an automated way to compare pre-settlement, cross-product trades

Tri-Party Connectivity (RQV)

Allows collateral providers and receivers to agree required values (RQVs) and send agreed-upon figures to a tri-party agent

SFTR About

ABOUT SFTR

WHAT IS SFTR?

The Securities Finance Transaction Regulation (SFTR) aims to reduce risks by improving transparency in securities financing markets and forms part of the EU’s response to the policy proposals issued by the Financial Stability Board (FSB) in August 2013. It will require counterparties to report details on trades and collateral (including reuse) to a registered trade repository (TR). Managers of UCITS and AIFs are also required to disclose the details of the use they make of SFTs and total return swaps.

The European Securities and Markets Authority (ESMA) issued its final report on the technical standards for SFTR on March 31, 2017, and the European Commission adopted the RTS & ITS on December 13th 2018, leading to a projected live date of Q2 2020. The report details a total of 153 reportable fields covering securities lending, repo, buy/sell-back and margin lending.

WHAT CHALLENGES WILL MARKET PARTICIPANTS FACE WITH SFTR?

Although the European Commission has adopted the RTS & ITS, the date of entry into force for the RTS remains a subject of debate. Nevertheless, what is certain is that the main challenge for market participants will revolve around the content and timing of the reporting requirements for trades and collateral. The reporting requirement is dual-sided and requires the provision of a unique transaction identifier (UTI) for each trade and a legal entity identifier (LEI) for the counterparts in the trade.

A mandatory reporting format has been proposed, which would require the inclusion of a comprehensive series of details throughout the lifecycle of the trade. Market participants will be confronted by the need to track, manage and report a large volume of data, some of which may be captured by upstream or downstream systems, creating a potentially costly requirement to upgrade current systems or build out to external sources.

 

HOW IS EQUILEND IMPLEMENTING ITS SFTR SOLUTION?

We are working in partnership with Trax and in concert with industry bodies, clients, tri-party agents and TRs to provide an automated, consolidated, scalable solution that removes the necessity for manually intensive intervention from clients and provides transparency throughout the process.

CHALLENGES & CONSIDERATIONS FOR MARKET PARTICIPANTS

For the majority, counterparties are currently recognised by internal codes, and LEIs are not stored in front-end systems. Lenders are challenged with disclosure of their underlying principals (beneficial owners) and the associated timing of that disclosure. The Agency Lending Disclosure (ALD) process as it stands will not facilitate timely reporting. A subsequent challenge for the borrowers is housing the data received from lenders.

Experiences under EMIR highlight the importance of a robust mechanism for generation and sharing of UTIs to support trade matching and reconciliation from initiation through to termination.

All new transactions will be required to have an execution timestamp. These can be generated at point of trade via NGT (EquiLend’s multilateral trading facility). Any off-platform trades require additional attention to ensure agreement within the alloted one-hour tolerance window.

Trades with known collateral are reportable on a T+1 basis. Where collateral is not known at point of trade, it is reportable on S+1. Agency structures with pooled clients collateralised with pooled collateral will need to be appropriately allocated and fully disclosed for onward reporting.

Unlike MiFID, all lifecycle events that impact any of the reportable fields need to be reported through to termination.

Market research, prepared by The Field Effect in its white paper “SFTR: Navigating the Challenge,” has indicated firms may have difficulty sourcing up to 40% of the required reportable data. Governing agreements and versions is one of the many challenges. For some, these legal agreements are centrally stored, but for many this is not the case.

For many, fragmented systems hold various elements of the required data set for reporting. Clients may be faced with the need to upgrade their current infrastructures to support reporting obligations.

Clients will need the ability to identify and capture all in-scope reportable transactions, recognising if they are reportable under SFTR (or MiFID).

Reporting requirements are phased in according to the type of firm. Investment firms and credit institutions go live on day one. Non-financial counterparts (NFCs) go live nine months later. Although NFCs are not required to report for the first nine months, they will still be required to provide beneficiary information and LEIs to their counterparts. UTIs will still need to be generated but are still reportable by just the in-scope party.

News

A Day in the Life (Securities Lending Times) How the joint EquiLend/Trax solution can streamline SFTR reporting - October 2018

Is Time Running Out? (Securities Lending Times) Why there needs to be a focus on how your vendors support you - October 2018

SFTR Activity Ramps Up (Markets Media) August 10, 2018

REGIS-TR to Collaborate With EquiLend and Trax on SFTR Reporting Solutions - August 2, 2018

DTCC Collaborates with EquiLend & Trax to Advance Securities Financing Transaction Reporting Processes - June 5, 2018

EquiLend & Trax on SFTR (Securities Lending Times) - May 15, 2018

EquiLend and Trax to Launch Interoperable Front-to-Back SFTR Offering - September 20, 2017

SFTR Solution

EQUILEND SFTR

EquiLend and TRAX, the post-trade services engine of MarketAxess, are collaborating on a full front-to-back Securities Financing Transactions Regulation (SFTR) solution to support the industry in meeting their reporting obligations.
EquiLend’s expertise in the securities finance industry combined with TRAX’s regulatory reporting and repo trade confirmation heritage result in a comprehensive service covering all SFTR eligible asset classes.

The Clock Is Ticking: Countdown to SFTR Reporting Go-Live

OUR SOLUTION

Clients need to report to a chosen trade repository by T+1 both sides of a trade, any associated collateral, plus modifications throughout the lifecycle using a common UTI. They must also manage any exceptions in the reporting flow. Additionally, clients must deal with any reconciliation discrepancies flagged by the trade repository. The EquiLend and TRAX solution enables firms to meet regulatory requirements by using regulated trading, post-trade and reporting platforms to do the following:

As leading providers of trading, confirmation and reporting solutions, EquiLend and TRAX are ideally placed to offer solutions around Unique Transaction Identifier (UTI) generation, timestamps and lifecycle events to help firms meet their reporting obligation. EquiLend and TRAX offer a joint solution that allows firms subject to SFTR to obtain a pre-repository match to help ensure accurate reporting and efficient exception management processing.

The fully interoperable solution enables the onward routing of trades to the TRAX Insight engine, which (i) enriches the reports submitted by a client with reference data and (ii) sends the enriched transaction reports to certain trade repositories. The TRAX Insight engine captures and centralises reporting flows, enabling firms to manage exceptions through a single interface and to rely on TRAX’s rules engine to filter and enrich trades. Clients will also be able to benefit from delegated reporting.

SOLUTION TIMELINE

 

BENEFITS

  • The EquiLend and Trax SFTR Insight Solution offers clients:
    • Expertise in securities finance and regulatory reporting space with access to largest Securities Lending and Repo community
    • ESMA-compliant UTI and Execution Timestamp at Point of Trade via NGT and point of matching via Post Trade
    • A complete reporting solution including enrichment, eligibility, break management either via Direct or Delegated Reporting
    • Message validation and counterparty field comparison pre-repository ingestion
    • A centralised view of MiFID and SFTR reporting
    • A customisable client dashboard, which includes MI reports and benchmarking
    • UTI Portal for industry wide sharing of UTI information
    • Insulation from future Regulatory/Repository change cost and development need
    • Aggregated reporting price benefit (subject to TR pricing structure)
    • Adherence to a common industry solution realizing matching efficiencies and contribution to a vendor aligned collective voice.
  • ESMA-compliant UTI and execution timestamps auto-generated and shared at point of trade, the earliest stage for SFTR reporting
  • Loan allocations shared at point of trade, providing UTI and execution timestamps on underlying principal funds and beneficial owners
  • 100+ trading client base, offering maximum access to the securities lending and repo community
  • A fully automated front-to-back SFTR reporting solution: trades booked on NGT can be subsequently auto-enriched via SFTR Insight with relevant data fields and reported within minutes to the trade repository
  • Reconciliations on trades show an average break rate of less than 1% across the lifecycle for transactions executed on NGT versus a 35% break rate for transactions executed off platform

SAMPLE SECURITIES LENDING REPORTING SCENARIO

NEWS

A Day in the Life (Securities Lending Times) How the joint EquiLend/Trax solution can streamline SFTR reporting - October 2018

Is Time Running Out? (Securities Lending Times) Why there needs to be a focus on how your vendors support you - October 2018

SFTR Activity Ramps Up (Markets Media) August 10, 2018

REGIS-TR to Collaborate With EquiLend and Trax on SFTR Reporting Solutions - August 2, 2018

DTCC Collaborates with EquiLend & Trax to Advance Securities Financing Transaction Reporting Processes - June 5, 2018

EquiLend & Trax on SFTR (Securities Lending Times) - May 15, 2018

EquiLend and Trax to Launch Interoperable Front-to-Back SFTR Offering - September 20, 2017

EquiLend Clearing Services

EQUILEND CLEARING SERVICES

CENTRAL CLEARING CONNECTIVITY

EquiLend Clearing Services (ECS) provides direct connectivity to CCPs for central clearing of securities finance trades. Our services offer powerful trading and post-trade tools that improve efficiency and mitigate risk. They integrate into a firm’s existing environment and can be fully automated.

 

  • We currently have connections to OCC and Eurex, and have delivered a solution that is portable across CCPs globally.
  • The ECS Gateway provides a central point for all matched transactions to flow directly to a CCP, while delivering real-time updates on settlement back to clients.
  • ECS offers a front-to-back solution from trade execution through the lifecycle of the trade, including support for returns, recalls, rerates and corporate actions.
FEATURES
  • ECS operates the only CCP-based securities lending market in the U.S. We facilitate securities lending trading for OCC-eligible securities, including over 6,000 underlying equity, ETF and ADR products
  • Offers seamless connectivity to OCC’s Market Loan Program for trade instruction and reconciliation
  • Delivers trading access to marketplace, matching lender supply with borrower demand and allowing users to view liquidity in the market
  • Provides powerful trading and post-trade tools that improve efficiency and mitigate risk. They integrate into a firm’s existing environment and can be fully automated
EQUILEND CLEARING SERVICES & OPTIONS CLEARING CORPORATION

EquiLend Clearing Services has established a partnership with Options Clearing Corporation (OCC) to offer direct connectivity to OCC for central clearing of securities finance trades.

EquiLend Clearing Services operates an anonymous trading platform, including trading and middle-office functionality. ECS is also developing a solution to manage centrally cleared transactions in a disclosed manner.

Matt Collins

Director
Markets & Trading, ECS
+1 646 767 4314 
matt.collins@equilend.com 

John Surgent

Associate Director
ECS Gateway 
+1 646 767 4325
john.surgent@equilend.com

EquiLend Spire

INTRODUCING EQUILEND SPIRE:

Flexible, Modular, Customizable—A Bespoke Technology Solution For All Your Securities Finance Business Needs.

EquiLend Spire is a state-of-the-art platform and technology-driven hub for securities finance firms of all types, including agent lenders, prime brokers, retail brokers, beneficial owners and collateral managers. Managing your securities finance business has never been more efficient.

Consolidate disparate systems by adopting our comprehensive, full-service offering covering the front, middle and back office. Or, choose one or more modules that complement and are interoperable with your existing technology. EquiLend Spire streamlines the management of your operation with a bird’s eye view of your entire business.

EquiLend Spire ties in seamlessly with EquiLend platforms including NGT (trading), PTS (post-trade), DataLend (market data), EquiLend Clearing Services and a variety of other systems, market infrastructures and vendors across the industry. Use the EquiLend Spire interface or link the platform to your proprietary system for a powerful engine allowing you to drive your business from one central hub.

EQUILEND SPIRE OFFERS:

  • Centralized management of your entire securities finance business
  • Comprehensive, industry-specific functionality
  • Cutting-edge technology and automation
  • Seamless integration with EquiLend and other securities finance industry service providers including DTC, SWIFT, Pirum, FIS (Loanet), Broadridge (Anetics) and Helix
EquiLend Spire allows users to leverage an industry-leading financing platform with EquiLend’s many automated trading and post-trade services to optimize and efficiently process inventory management, cash and non-cash collateral, trade distribution through electronic trading algos and trading desk P&Ls—all with enhanced management and client reporting.

MODULE 1: SECURITIES FINANCE CORE

– A COMPREHENSIVE BOOKS & RECORDS/SUBLEDGER SYSTEM –

EquiLend Spire’s Operations functionality provides risk management and client services for securities lending business managing lending portfolios on a day-to-day basis. It ensures that all trading activity, collateral management and ancillary processes are completed each day with any associated risks escalated and resolved in a timely basis.

  • EquiLend Spire can monitor all operational activities and ensure that they are carried out in accordance with corporate and regulatory policies and associated business activities and priorities
  • EquiLend Spire maintains metrics on both the execution and integration of overall operations strategy in coordination with technology and business partners
  • EquiLend Spire can develop and maintain key performance indicators/metrics to support business needs, influence behaviors and increase STP rates
  • EquiLend Spire allows for the processing and monitoring of all trade lifecycle events (settlement, mark to market, return, etc)
  • Support for returns and recalls

EquiLend Spire features reports designed to provide clients with a guideline to monitor and oversee various aspects of their securities lending program.

  • The reports can be customized to meet a client’s requirements, and EquiLend Spire continues to upgrade and enhance the current reporting capabilities
  • Target-specific goals and detailed reporting allow clients to gain enhanced confidence in their securities lending programs
  • Reports provide greater understanding of all aspects of a client’s securities lending program and provide the necessary tools to better assess risk and return dynamics
  • User-configured history available
  • Scheduled or on-demand access available
  • Standard report templates available

Today, there is an increasing amount of bilateral and multilateral automated lending whereby securities are broadcasted as available at particular rates by electronic trading platforms, email or other means. Where lending terms are agreeable, automatic matching can take place. EquiLend Spire can connect borrowers and lenders through a common, standards-based global equity lending platform, enabling them to transact with increased efficiency and speed as well as reduced cost and risk.

  • Configurable options allow clients to create customizable setups for individual users
  • Integration with multiple security pricing feeds to assist with accurate counterparty exposure and loan contract reconciliation
  • Flexible counterparty profiles
  • Flexible deal-type settings

EquiLend Spire looks at trends and helps discover the core drivers behind a securities lending group’s results. Reviewing results and trends with various metrics such as earnings, utilization rates and spreads will enable management to evaluate their group’s performance.

  • Performance attribution reporting
  • Clear understanding of how those earnings were achieved
  • Delivers transparency and metrics that are easily understood by all parties
  • Accrual calculation
  • Flexible account structure for book management and reporting
  • P&L
  • Highly efficient billing process, seamlessly integrated with EquiLend’s Billing service
  • Client earnings statements supported by detailed accounting ledgers, ensuring data integrity and transparency

EquiLend Spire offers a fully managed and comprehensive communication channel to securely connect the system to vendors and depositories in the securities lending marketplace, ensuring efficient and effective integration with program counterparties for back-, middle- and front-office personnel.

  • Direct integration with EquiLend messaging protocols
  • Real-time links to proprietary systems/GL
  • Single platform approach
  • EquiLend Spire’s integration team can help integrate your back, middle and front office more effectively with counterparties
  • SWIFT/DTCC connectivity
  • Support for other third-party vendor solutions
  • MQ messaging layer supporting multiple formats (XML, SWIFT, etc.)
  • We can also support your integration project with additional services, products and tools

Research indicates widespread belief that the risks involved in clearing and settlement are unacceptably high. There’s every reason to believe that future developments in international markets will be even more challenging. EquiLend Spire’s global settlement module is the right tool for this dynamic environment.

  • Strengthens and streamlines the basic clearing and settlement model, making clearance and settlement systems fully interoperable
  • Integrated with EquiLend’s Settlement Instructions Repository
  • Permit any qualified user access to systems and services on fair and transparent terms
  • Leveraging SWIFT messaging and direct connectivity to settlement depositories to create efficient, straight-through processes generates high levels of settlement automation, mitigates fails and allows for operations personnel to be deployed to high-value activities and exception management

Like all investment activities, securities lending involves certain potential risks, primarily counterparty, collateral, operational and tax/legal/regulatory risks. EquiLend Spire can help mitigate securities lending program risk by enabling firms to carefully plan, execute and manage their program’s credit quality guidelines for collateral, strong internal controls and audit purposes.

Systems will be held to a higher standard as compliance officers insist on greater data accuracy and descriptive proof of assets. EquiLend Spire can address and mitigate these requirements and protocols.

  • Ongoing credit reviews tracking
  • Counterparty concentration limits monitoring
  • Defined and controlled within the expected risk profile
  • Compliance engine provides oversight of rules and testing
  • Support for Agency Lending Disclosure reporting process flow for agent lenders and borrowers

Complete loan processing of corporate actions and income collection including tracking, monitoring, and accounting for all mandatory and voluntary entitlements.

EquiLend Spire can help agent lenders with a wide range of collateral management solutions to meet daily operating, core and longer-term strategic cash and non-cash needs. This includes:

  • Money market funds to provide capital preservation, liquidity and transparency
  • Separately Managed Accounts designed to meet your specific investment objectives, risk tolerance and constraints
  • Sweep accounts for agent lenders needing an automated investment option for excess cash reserves
  • Covers repo transactions
  • Maintain and monitor all non-cash collateral per loan, per compliance guidelines

MODULE 2: ORDER/INVENTORY MANAGEMENT

– A FULL SUITE OF SERVICES TO MANAGE YOUR SECURITIES FINANCE BUSINESS –

EquiLend Spire offers clients a full suite of services to manage their securities finance business. Our comprehensive and customizable Order/Inventory Management module can fit all your needs in one platform. 

Intuitive, user-friendly order management system comprising a feature-rich, customizable interface, allowing both seamless movement between single and bulk trade entry and clearing numbers.

Features:

  • Fully integrated with EquiLend NGT and EquiLend Clearing Services through Messaging Gateway
  • Connects to various trading venues
  • Lending logic based on flexible rules
  • Integrated securities lending market data for quick reference
  • Security availability and locates
  • Ability to populate availability screen intraday and then “time-out” when supply is exhausted and provide notification (lendable inventory tracking and notification)
  • Rolls and opportunities
  • Calculate true rate depending on each counterparty’s pricing convention
  • Auto-match needs to availability
  • Easily identify easy-to-borrow collateral positions to assist in funding
  • Separate hard-to-borrow securities and portfolios for greater revenue while minimizing cash exposure
  • Utilizing DataLend or other vendors, know exactly the intrinsic value is for a given security

Borrower-specific features:

  • Automatic and manual availability file upload
  • Trades completed (automatic and manual trade completion)
  • Ability to move between different DTC clearing numbers
  • Reflects OCC-eligible securities
  • Alerts for Hedge vs. non-Hedge bookings
  • Ability to direct trades to Market Loan Program

Lender-specific features:

  • Fair allocation queue
  • Managing trading within client guidelines

Fully automated workflow process allowing quick and efficient views into trades done and returns processed. One unified platform to monitor and reconcile OCC and tri-party requirements in addition to cash management, target balances and connections to global depositories.

  • An area to set global settings (account info, mark to market protocol, etc.)
  • Returns and Recall Management
  • OCC cash monitor
  • Criteria-based auto-return
  • Ability to match and kill recalls
  • Mark generation
  • Net SPO charges for marks
  • Real-time insight into settlement status
  • As-of booking support on open contracts
  • Real-time DTC settlement status with view into pending trades and returns
  • RAD screen approval flow through to DTC
  • Inventory (box report) that reflects all DTC codes (10, 11, 20, 21, 30, 31, 280, etc.)
  • Ability to release pending loans and returns
  • EOD balancing tools
  • Corporate actions notification and automation for mandatories
  • Interface to post-trade comparison engines

Detailed, interactive dashboard allowing for counterparty credit and concentration monitoring coupled with supervisory authorizations and end-of-day sign off. All-in-one platform to approve, decrement and track both security locates and T+1 requirements.

  • A setting for administration details and storage (MSLA, GMSLA, GMRA, ISDA, etc.)
  • Robust report production suite
  • Counterparty activity and target balances
  • Automatically calculate recall exposure and initiate recall
  • Pricing interface (Bloomberg, IDC, etc.) for current price
  • P&L monitoring

High-quality data covering securities lending activities is needed for regulators to identify potential risks. EquiLend Spire can ensure the relevant attributes of a securities loan are in place, including counterparty, collateral type, haircut, securities lending fee and rebate. EquiLend Spire will also assist in ensuring for the proper collection and management of:

  • Dividends
  • Rebates
  • Margin
  • Cash collateral reinvestment guidelines

In addition, EquiLend Spire will monitor restrictions on the “interconnectivity” of larger financial institutions to help promote greater transparency.

MODULE 3: SEG OPTIMIZATION

– FREES UP SECURITIES AVAILABLE IN MARGIN THAT HAVE THE GREATEST P&L OPPORTUNITIES –

  • Performs daily root cause analysis of delivery deficits and prompts steps needed to bring securities into possession or control for any Possession or Control violations created
  • Executes daily analysis of actionable items required under Possession or Control. These items include fail to receive, stock loans, stock dividends, bank loans, customer shorts and firm inventory shorts that cause deficit
  • Through daily reviews of segregation calculations, EquiLend Spire directs Seg Optimization system calculations, stock borrow/stock loan recommendations and conduit borrows and loans
  • Ensures that control locations have proper documentation such as custodial agreements, clearing agreements, acknowledgement letters, etc.
  • Through daily analysis and leveraging DataLend data, EquiLend Spire looks to free up securities available in margin that have the greatest P&L opportunities

MODULE 4: FULLY PAID LENDING

– GAIN THE OPPORTUNITY TO EARN INCREMENTAL INCOME ON YOUR PORTFOLIO THROUGH THE SECURITIES LENDING MARKET –

  • Through EquiLend Spire’s Fully Paid Lending module, you can borrow certain fully paid for excess-margin securities that other firms desire to borrow. In return, you gain the opportunity to earn incremental income on your portfolio through the securities lending market
  • Your customer maintains full economic ownership of the securities on loan and may sell the securities or recall the loan at any time
  • Automatically deposits monthly income payments into your client’s brokerage account, and your portion will be directed to your firm
  • Calculates and tracks the collateral received for your loans
  • • Allows you to easily monitor the number of shares on loan and loan values by client, investment professionals or office range
  • Allows your customers to view their securities on loan and income payments on their account statements through a direct-access client portal
  • Customizable to meet the needs of your FPL program

MODULE 5: SHORT SALE APPROVALS

– FULLY AUTOMATED PROCESS IDEAL FOR TRACKING AND AUDIT PURPOSES –

  • White-label client portal for direct client access and efficient processing
  • Logic to provide quick response and turnaround of locate request
  • Link the short sale to the locate
  • Aggregate availability from both internal and external supplies
  • Approve request, respond to client, provide reference number and decrement availability
  • Easily scalable to support multiple requests or indications of interest (IOI) through an approval gateway

EQUILEND SPIRE NEWS

EquiLend Spire: Untangling the sec finance spider web
Combined forces

Michael Doyle

Director
Sales, North America
michael.doyle@equilend.com
+1 646 767 4335

Trish Barry

Director
Business Analyst, Clearing & Middle Office Group
trish.barry@equilend.com
+1 (646) 767 4307

EquiLend Exposure

EquiLend Exposure

Increased regulatory reform, combined with the requirement for financial institutions to manage collateral in a much more cost-effective manner, has meant that transparency and optimization of collateral usage is imperative. EquiLend Exposure is uniquely designed not only to help clients maximize their collateral but also streamline and enhance the underlying borrow/ loan settlement process to provide the following:
  • Pending and actual, real-time exposure risk valuations with counterparts
  • Up-to-date transparency on inventory with options to better utilize these positions
  • Link collateral processing directly to borrows/loans to greatly improve settlement rates and reduce latency
  • Control and governance to ensure that the collateral transactions are executed exactly how clients would expect

EquiLend Exposure will be rolled out in three pillars, with iterative releases throughout the year: Exposure Management, Collateral Management, and Inventory Management

  • Exposure management dashboard, providing an instant view of exposure risk with counterparts
  • Calculate actual and forecasted exposure numbers split by counterpart and collateral type
  • Absorb counterparts’ equivalent data and provide real-time reconciliation
  • Direct real-time linkage into Unified Comparison to enable instant resolution of discrepancies
  • Automatic connectivity to collateral modules, including Mark to Market and RQV (Tri-Party Connectivity) screens
  • Automatic connectivity to all tri-party agents, providing straight-through processing (STP)
  • Ability to prioritize collateral requirements, for example, independent pre-pay calculations and agreement
  • Real-time receipt of collateral allocations from tri-party agents
  • All up-to-date data absorbed and displayed on easy-to-view screen

All data will be leveraged from your OneFile submission. Phase 1 is live in production.

  • Digitization of collateral schedules, creating a centralized, transparent repository
  • Attesting the collateral pledged against the collateral schedules
  • Independent pricing of collateral pledged
  • Real-time dashboard of inventory positions
  • Detailed MIS reporting, offering the ability to monitor counterpart performance as well as provide clearer transparency on the costs involved in process management
  • Greater STP on connecting collateral movements and reducing settlement latency, including loan release and return processing
  • Automation and validation of bilateral non-cash transaction process leveraging NGT shared trade tickets

 

 

 

 

  • AI inventory optimization across tri-party agents

 

 

 

 

 

 

 

RQV - Auto RQV Calculation and Connectivity With Tri-Party

  • Using client’s data (CEF, CIF, Price and FX), the EquiLend Exposure system will segregate & calculate today’s prepay and RQV numbers
  • System can also calculate the future prepays
  • Clients can reconcile the RQV numbers with counterparty RQV numbers (calculated using counterparty’s OneFile)
  • User can view the breakdown of prepay & RQV numbers based on the escrow accounts created at each tri-party agent
  • User can send today’s prepay number, and once confirmed by tri-party, can send the RQV number to the tri-party agents
  • User can send multiple RQV messages to the tri-party agents from EquiLend Exposure screen
  • Users can edit the RQV if there are any discrepancies
  • Processes the collateral allocation sent by the tri-party agent
  • Users can view the breakdown of collateral allocation by the tri-party agent
  • EquiLend is connected to global platforms BNY Mellon, Euroclear and JP Morgan tri-party agents. Clearstream will be connected later in 2019.

Unified Comparison

UNIFIED COMPARISON

OVERVIEW

Unified Comparison lets you interact with your post-trade system in completely new ways. Its flexible, automated workflow management will liberate break resolution, letting you choose precisely what you want to view and how you want to communicate with your clients. Unified Comparison is the nucleus for post-trade lifecycle management and a gateway into all the other PTS products available within EquiLend. By connecting to Unified Comparison, you will reduce downstream lifecycle noise and be positioned to adhere to future regulatory initiatives.

HOW IT WORKS

Fast connections for high performance
Intra-day One File connectivity allows for fast data transfer, ensuring you are instantly connected to all your necessary content

Reduces clutter
Unified Comparison is incredibly content rich, but with its dynamic filtering it allows you to focus on your key risk initiatives effortlessly. It aggregates the data so that you can get a more complete and succinct picture of all your client portfolios

Easy visibility
What is the best way to improve your settlement rates or reduce your P&L issues? Unified Comparison helps you structure your workload. Priority columns direct you to fix your most important breaks first

FEATURES
  • Supports all equity and fixed income products
  • Reconciles global pending trades to recognized industry standards
  • Customizable filters and columns catering for individual preferences
  • Multi-search capability to allow easy access to relevant data
  • Ability to normalize non-vanilla activity

Settlement Instructions Repository

SETTLEMENT INSTRUCTIONS REPOSITORY

OVERVIEW

The Settlement Instructions Repository offers an automated service for central storage of all settlement instructions. It is a product agnostic service which can facilitate the sharing of instructions across all markets.The flexible upload functionality and automated email alert notifications allow users to efficiently manage their instructions process. Managerial authorization of instructions and changes ensure that instructions are tracked for data integrity and compliance. Settlement Instructions Repository also integrates into EquiLend’s Settlement Comparison service, enriching trade level details to your pending loans and returns.

HOW SETTLEMENT INSTRUCTIONS REPOSITORY WORKS
  • A client uploads settlement instructions into the repository
  • EquiLend generates an email and approved users authorize instructions
  • Upon approval, EquiLend generates an email to notify counterparties of new instructions
  • Counterparties review instructions, update their proprietary system, and amend EquiLend status to “Confirmed”
  • EquiLend generates an email notification to both clients confirming the instructions
  • Instructions are managed in the repository for easy access and research

KEY FEATURES
  • Utilize the repository across all markets and products
  • Centrally manage the settlement instructions process across organization
  • Receive email notifications alerting counterparties of all instruction updates
  • Conveniently store history of all instructions and changes
  • Facilitate callback process electronically
  • Instructions can be incorporated into Settlement
  • Comparison allowing clients to effectively compare contract details

 

Contract Comparison

CONTRACT COMPARISON

OVERVIEW

Contract Comparison allows users to compare contract terms for US and non-US equities and fixed income contracts, identify discrepancies, and view and reconcile the breaks online. Comparisons can be performed on loan contracts, returns, recalls, and collateral records. Contract Comparison facilitates the Mark-to-Market process and the billing process by enabling users to identify and reconcile differences early in the life cycle of a trade.


HOW CONTRACT COMPARISON WORKS
  • Open contracts or contracts pending settlement are submitted by both counterparties at a pre-agreed time
  • Corresponding counterparty records are compared and discrepancies identified
  • Results are returned immediately after the matching algorithm is complete
  • Counterparties reconcile breaks by taking actions and using comments on the browser
  • Counterparties take appropriate actions in their proprietary systems to correct breaks

KEY FEATURES
  • Contracts can be compared even if not traded on the EquiLend platform
  • Comparison process can run at one of several predetermined times or throughout the day
  • Corporate actions can be reconciled, or managed to avoid breaks by the Security Linker or Exclude Security functions.
  • Flexible exception rules accommodate differences in counterparties’ proprietary systems
  • Customizable tolerances eliminate false breaks due to rounding and small monetary differences
  • Security level aggregation with the ability to see lot level details
  • Customizable browser shows relevant fields in any order
  • A sophisticated matching algorithm ensures that breaks appear cleaner and more succinct
  • Public and private comments provide the ability to record notes on a break
  • Persistent actions and comments allow users to track break age and history
  • Customizable management reporting to review break trending and aging
  • Available through XLS file upload via the browser

Returns & Recalls

RETURNS & RECALLS

OVERVIEW

The EquiLend Returns & Recalls services provide an efficient, automated way for borrowers and lenders to send return or recall notifications. 


HOW RETURNS & RECALLS WORK
  • A counterparty initiates a return/recall for a specific contract using a unique EquiLend ID, or may issue a more general return/recall for one or more securities
  • The recipient may acknowledge the receipt of a return/recall via the EquiLend screen or through messages integrated into their prop system
  • EquiLend provides reporting and tracking capabilities to monitor return/recall status online

KEY FEATURES
  • Initiate returns/recalls via the browser, XLS file uploads or messaging
  • Set system to automatically acknowledge the return/recall or have active control
  • Ability to bilaterally agree on customized cut-off times by market
  • Using an EquiLend ID, initiate a return/recall that is contract specific for both parties
  • Through a direct link to the DTCC ARMS hub, EquiLend clients can recall U.S. securities from non-EquiLend clients with whom they have transacted
  • Ability to return or recall all global equity and fixed income securities

ALD

AGENCY LENDER DISCLOSURE (ALD)

OVERVIEW

EquiLend’s ALD service acts as a conduit for data transfer between EquiLend counterparties globally. It also provides secure and timely transfer of principal loan data as a facility for approving underlying principals. This enables the credit prequalification of principals on EquiLend ALD, which in turn permits clients to calculate daily capital adequacy on their proprietary systems.


HOW ALD WORKS

Credit Prequalification
Borrowers must actively prequalify each principal lender with whom they will transact.

Daily Capital Calculation
Helps borrowers to perform regulatory capital calculations and credit exposure monitoring.

Comparison & Reporting
EquiLend produces comparison data with highlighted breaks. A selection of reports are available for review or download for the operations and credit groups.


KEY FEATURES
  • Send or receive ALD files with all counterparties, even if they are not EquiLend clients
  • Deliver and receive daily position and activity files through the EquiLend platform
  • Account management tools include broker affirmations of new principal accounts opened by agent lenders
  • Flexible exception rules accommodate differences in client proprietary systems 
  • Persistent actions and comments allow users to track break history
  • Reporting displays lender contracts aggregated with totals
  • Exception reports highlight allocation and loan discrepancies
  • Compliant with SIFMA and ISLA standards
  • View the status of principals in the browser

Dividend Comparison

DIVIDEND COMPARISON

OVERVIEW

Compare dividend claims and payment details with Dividend Comparison, which highlights breaking information between two counterparties.


HOW DIVIDEND COMPARISON WORKS
  • Files are submitted by both counterparties 
  • Claims are compared and discrepancies identified using a multi-step algorithm
  • Counterparties resolve breaks on the browser and messaging is sent back, which can automatically update a client’s proprietary system
  • Pre-advice functionality allows users to send claim payment details; alternatively, a client can send a one-sided file and the receiver can affirm the claim and payment details

KEY FEATURES
  • Data delivery by browser entry, FTP or XLS file upload
  • Pre-advice offers payment instructions, which can be received by a firm’s proprietary system
  • Customizable tolerances by currency
  • Two-sided comparison or single file delivery with counterparty affirmation
  • Public and private comments to record notes on a break
  • Ages unresolved breaks prior to and post pay date
  • Reduces time spent manually reconciling & paying or making claims
  • History tab displays data from past runs
  • Get paid on time!

Billing

BILLING

OVERVIEW

In many ways the automation of the post-trade life cycle has never been better. Contracts are more regularly reconciled. Intraday reconciliation goes beyond anything you may have previously imagined. But something happened as we ventured into this exciting new world—the billing process got left behind.

Our goal with EquiLend Billing was to engineer a complete end-to-end Billing experience utilizing the lightest and most compact process seen to date. That meant reimagining every step of the billing life cycle to make it easier for clients to recoup their revenue within the current billing month. The result is more than just a reconciliation product. It is a unique, flexible, integrated solution that allows clients to communicate efficiently. EquiLend Billing has all you need to create, distribute and reconcile your bills today.

 

HOW BILLING WORKS

Generate and distribute statements automatically.
Connect either through a standard billing file or leverage the existing Billing Comparison file. Billing statements are automatically generated and distributed on clients’ behalf to all their counterparts. The counterpart doesn’t even need to be an existing EquiLend client.

Reconciliation. Payments. Tracking. You’re covered.
Detailed, daily reconciliation of security breaks is a cinch. Use the interactive reconciliation functionality to resolve the discrepancies and agree the bill directly from the Billing screen.

All your life cycle events. One seamless product.
EquiLend Billing works seamlessly with Unified Comparison, allowing clients to easily transfer the reconciliation work already completed in Unified Comparison into EquiLend Billing.


KEY FEATURES
  • Ability to create statements in both PDF and Excel with automatic distribution
  • Billing dashboard to monitor progress across all your global counterparts
  • Easy setup for faster implementation of service
  • Statements can be downloaded for reconciliation, printing and storage for audit records
  • Detailed reconciliation screen both at security and daily interaction level
  • Filters and Sorts on the browser help make the reconciliation process more efficient
  • On-screen visualization of outstanding payables and receivables
  • Offers direct access to historical break detail on Unified Comparison
  • Public comments provide the ability to record notes on a break

Mark-To-Market Comparison

MARK-TO-MARKET COMPARISON

OVERVIEW

Mark-to-Market Comparison allows users to compare mark values, prices and other loan details for cash and non-cash loans. Customizable tolerances and rules can be applied based on collateral currency and mark amount to auto-mark records. Mark-to-Market Comparison offers the ability to automatically submit Security Payment Order (SPO) charges directly from the screen to DTCC (for U.S. securities). Prices for the comparison can be sent by the client or automatically applied based on EquiLend’s pricing source.

HOW MARKET-TO-MARKET COMPARISON WORKS
  • OneFile is leveraged to generate marks comparison
  • A matching and comparison algorithm will highlight breaks on the old price, new price, quantity and mark amount that falls outside an agreed-upon tolerance
  • Matched and matched-within-tolerance records are returned to both counterparties in a standardized file, which can be integrated into a firm’s proprietary system
  • Items that fall outside the specified tolerance can be reconciled on screen in real time
  • Total mark value figures are agreed upon for cash collateral movements
  • SPO charges for matched and reconciled records are automatically sent to DTCC

KEY FEATURES
  • Leverages OneFile
  • Processes cash and non-cash mark records
  • Flexible tolerances and rules may be applied for specific currencies
  • Easily reconcile in real time directly on the screens
  • Aggregated security-level view and lot-level detail
  • Ability to automatically submit Security Payment Order (SPO) charges directly from Mark-to-Market screen to DTCC
  • SPO charges stored online for 6 months with XLS file download available
  • Interactive comments allow client and counterparty to record notes on a break
  • Reconciliation results can be automatically integrated into a firm’s proprietary system
  • A customizable browser interface, filters and global actions facilitate a simplified online reconciliation process

Trade Match

TRADE MATCH

OVERVIEW

Trade Match provides an automated way to compare pre-settlement, cross-product trades. It reconciles all the trade components of either the start or close leg of each trade type. Trade Match’s exception management reporting prioritizes the core pending settlement risk items, helping users to reduce fails and rectify trade economic discrepancies on a real-time basis. Built using the same technology as the Next Generation Trading (NGT) platform, Trade Match provides enhanced user flexibility and configurability. It is compatible to One File connectivity and allows users the ability to send multiple files throughout the day.

HOW TRADE MATCH WORKS
  • Both counterparties send in pending trade data across products for new loans and returns
  • EquiLend/BondLend run a comparison and display the exceptions, prioritizing high-risk events
  • Users reconcile breaks on browser
  • Clients can download the results in XLS from EquiLend/BondLend to update their proprietary systems

KEY FEATURES
  • Global comparison of cross-product trade data
  • Central overview of pending settlement breaks
  • Exception reporting with specific focus on pre-pay, settlement, trade economic and dividend breaks
  • Configurable screens allow user to personalize view
  • Internal and public comments
  • Excel downloads
  • Reconcile easily
  • Simplified trade-level drill-down
  • Send files via MQ, FTP or XLS file uploads

FUTURE FEATURES
  • Automated outbound files from EquiLend/BondLend for full STP
  • MIS reporting

Tri-Party Connectivity (RQV)

TRI-PARTY CONNECTIVITY

OVERVIEW

Tri-Party Connectivity allows collateral providers and collateral receivers to agree required values (RQVs) and send the agreed-upon figures to the tri-party agent. The service is available if both counterparties are using EquiLend’s Tri-Party Connectivity service or if only one client is using it.

HOW IT WORKS 
  • Collateral receiver and/or provider submits RQVs to EquiLend
  • EquiLend compares counterparties’ values against each other and facilitates the resolution of discrepancies
  • When the values match or fall within a provider’s tolerance, EquiLend sends the figures on behalf of both parties to the tri-party agent
  • The tri-party agent sends response messages acknowledging receipt of the figures, which EquiLend processes to generate individual status updates on the screen
  • The collateral receiver and the collateral provider each submit their RQVs to EquiLend
KEY FEATURES
  • Bulk submit RQVs via one XLS upload for all counterparties
  • Collateral provider submits aggregate value for a group of instructions; receiver determines breakdown by submitting values at individual fund leve
  • Receive response messages from the tri-party agent to know the real-time statuses of RQVs
  • Allegement messages with trade details displayed when a counterparty not using EquiLend is first to submit, so EquiLend clients can quickly and accurately respond
  • Collateral providers can set value & percentage tolerances on each instruction to facilitate comparison—not necessary to agree exact values
  • Receive alert if instruction sent to tri-party agent requires action