Clearing house support product of the year: FIA Tech

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FIA Tech takes home the award for Clearing house support product of the year for its Trade Data Network (TDN), which is designed to transform post-trade processing in exchange-traded derivatives (ETDs).

Launched in 2007 and owned by a consortium of 12 banks and the Futures Industry Association, FIA Tech works with the industry to develop key services and technologies that help market participants reduce risk, mitigate operational costs and meet market and regulatory challenges.

The ETD market has long struggled with a lack of transparency and high volumes of varied and inconsistent data, with multiple sources, formats, timings and standards. This hampers the accurate exchange of data and requires manual processes and duplicative reconciliations, making communication between participants slow and difficult. As a result, clearing and allocation systems are complex, inefficient and error-prone.

In response to these challenges, FIA Tech launched its TDN solution in October 2022. TDN integrates disparate post-trade ETD data in real time from multiple sources, including executing brokers, central counterparties (CCPs), clearing brokers and clients. It creates a single trade lineage in a common, secure, standards-based ledger. This provides market participants with a unified ‘golden source’ of data that is accessible, easy-to-use and transparent. 

The solution helps minimise clearing delays and reduce costs with standardised, efficient processes, including allocation, confirmation and resolution. These streamlined processes, and greater transparency into the status of a trade, reduce the risks of the give-up process.

Consistent data and in-built collaboration processes also mean trade and allocation breaks can be quickly identified and resolved, significantly reducing the frequency of interventions. FIA Tech reports that allocation and trade breaks for users can be reduced from as high as 20% to almost zero. Where intervention is required, TDN’s collaborative approach to communication between counterparties allows firms to share details of trade breaks and complete break resolution in real time. Clients using TDN for fees and commission calculation and tracking are also reportedly seeing brokerage fee breaks slashed almost to zero.

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By capturing data on each step of the trade lifecycle, TDN can provide buy- and sell-side firms with benchmarks and insights on performance, identifying opportunities for improvement. It also ensures quicker recovery and increased resilience in the face of any future systemic outages by providing a comprehensive solution to collate, store and back up all trade data in a format that is usable and accessible.

Working directly with leading software vendors and data providers, TDN allows each market participant to seamlessly interoperate using their own trading and clearing systems. Participants can easily integrate and normalise their data via the TDN Gateway infrastructure, and communicate with other market participants.

Funded by the market, TDN is already supported by more than 20 banks/brokers and 40 investment managers/hedge funds with total assets under management of $34 trillion. It has a comprehensive and growing connectivity to multiple exchanges and CCPs, covering 80% of the global futures flow.

Demonstrating market support for TDN, the firm has raised additional capital to continue enhancing and expanding its solution. FIA Tech describes TDN as a platform that is being consistently improved to meet market needs and increase overall operational resilience for ETD trading and execution.

Judges said:

• “This TDN solution definitely offers value to clients, streamlining data from multiple sources into a single data view.”
• “The value of this solution and its market benefits should not be underestimated.”
• “Genuinely useful support for listed derivatives clearing.”

Nick Solinger, president and chief executive of FIA Tech, says:

“We are extremely grateful to be recognised as Clearing house support product of the year and would like to thank the judges and our customers for their support. The award reflects our commitment to operational efficiency and reducing risk in the ETD market. The TDN has begun to revolutionise ETD operations and we are proud to have had the support of so many leading buy-side and sell-side firms and exchanges as we launched the initiative.”

 

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