Swift moves a step closer to STP

Swift, the industry-owned provider of messaging services and interface software to over 7,000 financial institutions, has teamed with Financial Fusion and Global Crossing to provide a FIX hub messaging application to the securities industry. The move should help securities firms in their effort to achieve true straight-through processing (STP) for their trading activities.

“Swift’s focus in the past has principally been on activities around the clearing and settlement part of the business. We have now moved forward into the pre-trade and trade space, which offers customers a single mechanism to automate the entire transaction from initial indication of interest through to the trade, matching, clearing and settlement,” said Simon Cleary, head of securities strategy at Swift.

The SwiftNet FIX hub, software for which has already been developed by Sybase-owned e-commerce specialist Financial Fusion of the UK, allows connectivity to a single secure trading session, with multiple counterparties for brokers and dealers, investment managers and exchanges. US digital communication network provider, Global Crossing, is providing the communication backbone.

Swift’s move from the back to the front office has important operational risk implications – it should reduce human interference and duplication of data between trade and settlement – as well as the added benefits of offering single-session trade management, faster connectivity to pre-established trading partners, lower networking costs and easier access to counterparties worldwide.

This collaboration extends SwiftNet's single-window access model, providing the front and back offices of securities firms with standardised messaging services that cover the entire transaction lifecycle. Ultimately, these services should facilitate translation between the various versions of the internet-based FIX protocol and other standards, including ISO 15022.

“In short, we’re increasing efficiency in terms of the number of people and systems that need to be supported, as well as making substantial time savings, especially from the initiation of the trade to its clearing and settlement,” said Cleary.

The SwiftNet FIX piloting phase is scheduled for early 2002, with its live launch expected to be around mid-year 2002. The organisation expects to have 100 users by the middle of 2003.