In today’s environment it is more essential than ever for financial institutions to meet their market and custodian deadlines for trade settlement. Failure to do so can result in trade failure, which can leave firms exposed to possible buy-in fines, interest claims and other penalties. In some emerging markets, these sanctions can be as severe as complete suspension from trading. It is imperative, therefore, that settlement instructions are transmitted both quickly and efficiently, with any issues raised immediately for remedial action.

nothing left to chance when dealing with settlement risk

Effective and efficient settlement is engineered right into the heart of salerio. Settlement instructions are sent seamlessly via SWIFT, email and fax formats for all asset classes managed by salerio to custodians, fund accountants, stock lending agents and any other designated parties. Users have complete flexibility to define exactly which trades get sent and what information should be sent electronically to settle.

salerio is built to minimise settlement risk. In the same way that trade confirmations are managed, any exceptions that salerio detects are elevated to its central hub for resolution. The primary focus of salerio is to only involve users to remedy exceptions and not to have them preoccupied with executing all the individual steps that normally accompany the settlement process. We begin very much with the end in mind.

Yet, salerio goes further to ensure nothing is left to chance. It has been architected with an added layer of validation using broker Standard Settlement Instructions (SSI) as a final settlement check. salerio uses its advanced matching engine to link broker SSIs held locally to the incoming SSIs on the relevant broker confirmation records. This extra step means that if discrepancies are detected, users are alerted immediately before any settlement message is sent.

built with even more capability

Using the same advanced settlement functionality that it uses to process securities, salerio also handles the processing of foreign exchange instruments such as spots, forwards and non-deliverable forwards by exception.

salerio integrates seamlessly to the global Continuous Linked Settlement (CLS) platform, meaning that foreign exchange transactions can be settled on a payment versus payment basis. On this basis, counterpart risk is greatly reduced because settlement can take place simultaneously.

Additionally, salerio is ready for the upcoming regulation change that will see mandatory clearing introduced for Non Deliverable Forward (NDF) products. In part response to raised counterparty risk, and concerns that counterparties might not meet their settlement obligations, regulatory authorities in the United States, the United Kingdom and the European Union are mandating centralised clearing for a specified list of NDF and OTC swaps derivative instruments. salerio interfaces directly to MarkitServ via standard SWIFT messaging to enable full automation of the NDF clearing workflow. The central hub keeps users fully appraised of any exceptions that prevent trades from being cleared

Irrespective of the asset class, salerio reduces settlement risk by giving users real time control by only having to intervene when exceptions arise.