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soon, followed by FX options and other instruments at some point this year. Clearing will likely begin after new rules are finalized and in place, he said. “We’re committed to keeping clients ahead of regulations.” MarkitSERV is also working with nearly 10 FX execution venues that plan to launch swaps execution facilities (SEFs) KEITH TIPPELL director and co-head and will provide of FX, MarkitSERV clearing and regulatory reporting connectivity to them by the end of this quarter. Infrastructure upgrades allowing the transport of new data and workflows associated with reporting requirements mandated by DoddFrank regulations will be in place by the end of the third quarter, Tippell said. The financial services provider announced last month a connection with CME Group for FX clearing and plans to bring more central counterparties (CCP) online by the end of the year, in addition to expanding the types of FX instruments it will clear and making infrastructure upgrades in response to new Dodd-Frank rules, according to Tippell. The vendor is also planning to expand its FX prime brokerage offering, but Tippell declined to specify how, only citing the firm’s roughly 80 liquidity providers and 600 clients as of this time. POST-TRADE
settlement for bilateral processing, according to a regulatory proposal from the utility. These transactions settling trade-for-trade are designated as Special Trades by the utility. In its filing at the Securities and Exchange Commission, NSCC said it already aggregates settlement obligations for counterparties in trades against each other after determining to settle trades in certain securities bilaterally. But those obligations are not ultimately netted, as are the majority of the other trades processed by the NSCC. Now, the utility plans to net the trades at its own discretion, it said. Netting the Special Trades will reduce the obligations for the counterparties down to a single deliver or receive obligation. In a footnote, NSCC said neither counterparty will have an obligation if an equal number of shares are traded between them, though the system will reflect the appropriate cash difference if any. NSCC will still aggregate the orders for these transactions if a net settlement would result in securities changing hands without an associated cash settlement, or if the settlement would result in one party receiving or delivering cash and securities, it said. POST-TRADE
State Street sees opportunity for new pension services
State Street anticipates it will play a large supporting role for pension plans as sponsors look to change the structure of their plans and the assets that the plans invest in, according to comments from executives at a media briefing last month. Joe Antonellis, vice chairman of State Street, said regulatory changes that mandate funds have more transparency for the purposes of reporting, which will require the funds to look at their data differently, and will
Special Trades to get netting treatment at NSCC
The National Securities Clearing Corp. plans to start netting trades designated for trade-for-trade settlement in a move to streamline
create an opening for the bank to provide more services. “It provides us with an opportunity to create new software products,” he said, noting that the opportunity is present whether plan sponsors are completing these reports internally or if they have outsourced the management of the fund to an asset manager who will have to produce reports. “The challenge is how quickly does it move, and can you do it in such a way that it can be leveraged around the rest of the world? Or is it specific and bespoke to a specific geographic location?” he questioned. In addition to regulatory requirements, pension plans are also looking to invest more alternatives and are looking for higher yielding assets to build out their plans this year, according to Kristi Mitchem, senior managing director and head of the institutional client group for State Street Global Advisors. “They are looking toward credit more expansively in terms of moving into things like infrastructure and things like leveraged loans, and then obviously emerging market debt as well as emerging market equity,” she said. That shift is moving plan sponso