In other FinTech news, IHS Markit takes on a MiFID II rule and CloudMargin is working with DTCC-Euroclear Global Collateral.
12 Banks Support Synechron-R3 Effort
Consultancy Synechron and enterprise software vendor R3 are collaborating to provide a know your customer (KYC) solution based on distributed ledger technology (DLT), and the partnership has the support of 12 global banks.
Described as one of the largest DLT projects of the year, the KYC solution being developed will use R3’s financial grade DLT implementation Corda, officials say.
The 12 banks supporting the LEIA 2 project were not identified but the vendors say the firms hail from four continents.
Synechron and R3 launched the project in July with “a three-month sprint to identify objectives and business requirements, define a roadmap, and develop a functional prototype on top of the Corda platform,” according to officials. “At the end of the project, Synechron will demo the solution in their Financial Innovation Labs (FinLabs).”
The project is intended to resolve problems with data collection, data validation, the customer experience and data privacy — key challenges for KYC systems among banks, officials say.
“DLT has inherent features that allow it to address KYC requirements for validated, trusted data without the risk of tampering or fraud,” according to the initial press release about the arrangement. “The technology also enables self-sovereign distribution models that enable the data owners, the corporates, to control the distribution of their own identity data.”
IHS Markit Aims New Service at MiFID II Trade Reporting Rule
IHS Markit, an information, analytics and solutions vendor, is offering a service that helps firms comply with MiFID II’s RTS 28, a requirement that firms “publicly report their top five trading venues by asset class,” officials say.
“Compliance with RTS 28 can be a burden because investment firms must create up to four documents for each of the 22 asset classes covered by the regulation, including equities and multiple types of debt instruments, OTC [over-the-counter] derivatives, structured products and emissions credits,” officials say. “Within each asset class, trades must be tabulated by customer type and order type and those reports published on a public web site.”
The vendor’s cloud-based solution lets investment firms outsource key data classification processes required for compliance, officials say.
“Using a propriety calculation engine designed for RTS 28, the service will categorize trades, tabulate data according to the statute and host required reports on a public website. The solution also offers detailed analytics on demand and through regular scheduled reports,” officials say.
CloudMargin to Connect to Global Collateral’s MTU
London-based CloudMargin, maker of Web-based collateral and margin management solutions, is getting a connection to the Margin Transit Utility (MTU) of DTCC-Euroclear Global Collateral as a result of a new agreement, officials say.
The MTU offering automates and streamlines the processing and settlement of margin and collateral for dealers and buy-side firms, according to the vendors. The solution is intended to capture settlement instructions, accelerate processing velocity, improve visibility and consolidate reporting.
The new link to the MTU service will help end-users “take advantage of straight through processing from call calculation to settlement of collateral in order to streamline and optimize collateral management procedures,” officials say.
Overall, the agreement will expand CloudMargin’s “settlement capability and enables users to access MTU from the cloud, fully automating the entire collateral lifecycle,” officials say.
“Through this partnership, mutual clients logged onto CloudMargin can access full MTU capabilities including automatically sending settlement instructions to their custodians enriched with centrally stored settlement instructions (SSIs) from DTCC’s ALERT database,” according to both vendors. “Users will also receive MTU’s automated intraday settlement status information directly into CloudMargin. This full automation of the collateral lifecycle reduces manual touch points, ensures data accuracy and creates increased transparency into the collateral process.”
The agreement also means that CloudMargin is the first vendor to join GlobalCollateral’s Partner Program, officials say.
“We already have significant interest among our clients and prospects, particularly in this environment where the requirements to post daily Variation Margin have introduced a pressing need for technological solutions and a community of providers available at clients’ fingertips,” says Simon Millington, CloudMargin’s head of product management, in a statement.
The CloudMargin and MTU link is expected to go live sometime during the fourth quarter of this year, officials add.
GlobalCollateral is a joint venture of Euroclear and the DTCC.
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