Packages can be tracked from order to delivery, so why can’t securities be traced from trade to settlement? 米歇尔Hillery, General Manager of NSCC’s Equity 清算 and 直接转矩 结算 Service, 存, tackled this question alongside other industry experts on day one of Sibos 2023.
It is true that transactions are much more complex than a simple package delivery, as allocations can include a single trade allocated to several different parties. While pockets of identifiers are available, they can differ across firms and platforms. What makes a unique transaction identifier (UTI) different is the ability to trace the trade through both downstream and upstream systems, providing trade status to all parties at any given point in the transaction.
The Modernization Moment
A few key benefits of leveraging a unique identifier include:
- Improved settlement rates and decreased fails.
- Increased 帖子-trade efficiencies.
- Greater transparency and end-to-end visibility across the trade lifecycle.
- Decreased cost by solving exceptions and increasing settlement rates.
Hillery指出, “A unique identifier would allow systems to speak with each other, deal with exceptions quicker, and lead to reduction in costs — providing both an economic benefit and an improvement in trade quality.”
UTI and Shortened 结算
The financial industry has been investing more and more in settlement efficiency — namely, 搬到 T+1 for North America in 2024. As markets move to T+1 or shorter, the need for reduced trade inefficiencies is clear and the benefits of UTI — such as quicker issue resolution and enhanced straight-through-processing — are obvious.
The ability to generate a UTI upstream and carry it through the trade lifecycle is simple, but can it evolve and change as the trade lifecycle progresses? Hillery concluded, “This is the modernization moment for the industry. How can we look at workflows and make them holistically more efficient and what is the angle we are trying to get to?”
JP Morgan’s Hannah Elson (l) and 存's 米歇尔Hillery (r) discuss the benefits of UTIs to solve more 帖子-trade inefficiencies.