Editors’ Choice Awards 2023: Market Infrastructure Project of the Year

Global Custodian takes an in-depth look at the nominees for the Market Infrastructure Project of the Year award. 

By Editors

Clearstream – Settlement Dashboard and the Settlement Prediction Tool 

In July 2022, Clearstream rolled out two new data solutions to help predict settlement failures and to foster greater settlement efficiency. 

The two new solutions, the Settlement Dashboard and the Settlement Prediction Tool, were designed to provide clients with predictions throughout the day to gain additional validation and to take appropriate actions to prevent any potential settlement fails.  

The solutions feature interactive visualisations that aim to provide insight and foresight to help clients make better decisions to improve performance and business growth. Clients benefit from a view of critical markets, asset classes and counterparties.   

Priya Sharma, head of data and connectivity at Clearstream, said at the time: “We at Clearstream and Deutsche Börse are convinced of the power of data. Our predictive and prescriptive solutions provide insight and foresight that help our clients make better decisions that improve their performance and business growth. Most failed settlements happen due to lack of detailed knowledge of one’s own settlement activities.   

“By leveraging high-quality predictive data, we provide our clients with that knowledge to be best equipped for regulatory requirements, operational excellence and settlement efficiency.”  

CLS Group – CLSNet  

Though not a new project, the milestones and achievements of CLSNet have been significant over the past 12 months.  

In August 2022, the group reported a record $100 billion in the average daily notional of net calculations, marking an increased adoption from market participants and follows the 179% year-on-year increase in the average daily notional of net calculations in H1 2022. 

In addition to the record numbers, CLSNet has been increasing its members as part of a broader strategy that aims to shake off its image as a traditional settlement services provider.  

These have included UBS, Deutsche Bank, Mashreq, Standard Chartered, MUFG and First Abu Dhabi. 

CLSNet standardises and centralises post-trade processes for global currency, with the aim of reducing risk, enhancing efficiency and improving liquidity for FX market participants.   

DTCC – Project Ion 

After two years of development, the Depository Trust & Clearing Corporation’s (DTCC) revealed in August 2022 that its distributed ledger technology (DLT) based settlement platform had gone live in a parallel production environment, processing up to 160,000 transactions per day.  

Project Ion has been in the works since May 2020, with a view to support a netted T+0 settlement cycle, as well as T+2, T+1 and extended cycles. 

Going live in parallel to existing settlement infrastructure, the project is processing an average of over 100,000 bilateral equity transactions per day, and almost 160,000 transactions on peak days. The Depository Trust Company’s (DTC) classic settlement systems remaining the authoritative record.  

The project has been developed in collaboration with the likes of BNY Mellon, Citi and JP Morgan.  

The goal of Project Ion – the DTCC said – is to ultimately provide a “resilient, secure and scalable alternative settlement service” to clients, with the option to leverage DLT for those firms who wish to take advantage of the emerging technology.   

DTCC partnered with leading enterprise technology provider R3 to develop and launch the Project Ion platform leveraging R3’s Corda DLT software.  

SWIFT – Securities View 

Of its many securities-related initiatives launched over the past 12 months, SWIFT’s Securities View makes the list here through a mix of innovation and demand for such a service.  

In September 2022, SWIFT completed a pilot of the new capability designed to increase transparency in post-trade processing. The new service aims to shed light on the lack of visibility following a securities transaction.    

Currently, there is no way of tracking all of the steps in the transaction across multiple intermediaries, which often leads to settlement fails that add operational costs of $3 billion a year, in addition to regulatory penalties such as those introduced by CSDR this year. 

SWIFT said that Securities View will provide participants with a clearer view of their transactions, helping to identify trades at risk of failing, including wary detection of discrepancies between buy-sell instructions. 

The platform will leverage 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.  

The pilot included the following market participants amongst others: ABN Amro Clearing Bank, BlackRock, BNP Paribas, BNY Mellon, Citi (Securities Services and Global Markets), Credit Suisse, Euroclear, Euronext, HSBC, JP Morgan, Northern Trust, Optiver, Pershing and SEB.  

Following the pilot, SWIFT said the new service would become available for broad adoption in 2023.