Securities Finance Repo News | Global banks test Finteum intraday repo and currency exchange platform

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Fourteen major banking groups have completed a trial to run intraday repos and intraday FX swaps through an interbank platform built by Finteum and a number of these banks plan to go live with the service when it is released in 2023.

The trial involved treasury and technology teams from major global banks, including BNY Mellon, Barclays, Citi and NatWest Group, and involved simulated trading sessions to test the capabilities of the platform, during which Participants executed 96 simulated intraday repo and currency swap transactions with a US total. $11 billion traded, based on 75 simulated orders in a central limit order book and 165 bilateral price requests (RFQs).

Representatives of national prudential authorities and liquidity experts from UK Finance, a representative body for the banking and financial sector, were also involved in the test simulations and subsequent discussions. The trial assumed DvP settlement using Euroclear Bank’s tri-party infrastructure.

Finteum says it is one of the first interbank venues to support intraday FX swaps and intraday repos on the same platform, allowing treasury teams to use these two markets interchangeably. to manage their financing needs.

Three major Europe-based banks plan to go live with the Finteum platform in the second or third quarter of 2023 when it is released by the London-based fintech company.

The Finteum solution uses R3 Corda enterprise blockchain technology, alongside a range of settlement solutions, which can include DLT-based settlement rails such as the Fnality payment system and non-DLT infrastructure such as the Tripartite of Euroclear Bank.

Further simulations involving real money test transactions are expected later in 2022.

Finteum has funded its development work on the project to date through funding from angel investors and plans to close a round of seed funding before releasing the platform next year.

Trial participants point to the Finteum initiative as an important part of their liquidity optimization strategy, allowing banks to borrow for hours at a time through the intraday liquidity facility it provides. This helps them optimize the management of their intraday liquidity reserves and potentially reduce their costs by millions of dollars each year, while also being able to lend out excess liquidity using the intraday repo facility.

Commenting on the progress of the project, Finteum co-founder Brian Nolan said, “We are excited to continue working with key participating banks and to include more banks in the group ahead of launch in 2023.

“It’s great to see key participating banks encouraging their peers to join as key participants and maximizing cost savings for all parties involved.”

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