nine currencies (CAD, CHF, DKK, EUR, GBP, JPY, NOK, SEK and
USD) with additional currencies to be added. The system is available
globally and is currently being used by clients in Asia, Europe and
North America.
All parties to the trade affirm a single copy of trade data, and this
record becomes the legal confirmation. This single copy remains in a
central repository, and is available to the parties to feed their STP
process. It also greatly facilitates the process of amending, terminating
or assigning trades, since everyone starts from the same place. The
repository can also be used for reconciliation purposes.
114 Clearing and settlement of derivatives
Broker
Trade
capture
Bilateral
agreement
Downstream
processing
Archive
Operations
Operations
Trader Trader
TraderTrader
Amend &
Cancel
Source: SwapsWire.
Summary
Over-the-counter derivatives have characteristics very different from
exchange-traded products, and in particular the clearing and settle-
ment processes can be quite different. In the appendices you will find
‘workflow road maps’ for some of the OTC products and it is important
to note the way in which the trade to settlement flow works and where
there are similarities and differences between on- and off-exchange
products.
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