UBS, CIBC settle intraday FX swap

At the time of the announcement, the EUR/USD intraday FX swap was the first one to be conducted on a regulated venue, with it being negotiated leveraging the Finteum Platform and performed on the TP ICAP UK MTF. In addition, both parts of the swap were reconciled by the two banks at pre-agreed time frames, within the same business day on T+0.

Through this approach to transactions, which more banks intend to execute this year, financial institutions plan to provide advanced savings opportunities for major banks. Considering that fewer solutions are required to control the receipt of funds within a settlement window, bank treasury teams are set to be able to maintain increased buffers of High-Quality Liquid Assets (HQLA) for intraday.

Concentrating its efforts on optimising trading processes, the distributed ledger technology (DLT)-enabled Finteum Platform aims to minimise trade time and allow banks to meet customer demands while minimising their HQLA requirements and achieving regulatory compliance to fund payment activity in real-time. Additionally, Finteum was registered by the Financial Conduct Authority (FCA) as an appointed representative, enabling its platform to be leveraged for arranging interbank transactions. The trade flow solution leveraged by Finteum and TP ICAP allows transactions to be orchestrated off-venue and executed and registered on an MTF.

Furthermore, representatives highlighted that this move is set to enable partner banks to achieve capital efficiencies, whilst also underlining TP ICAP’s commitment to collaborating with fintech firms to advance financial market modernisation. In addition, the Finteum Platform utilises R3’s Corda, an open, permissioned distributed platform for regulated markets. DLT allows both participants in a trade to transfer funds and securities to each other, without being required to exchange and reconcile MT300 or similar confirmation messages.

After a trial from April 2023 which included 14 global bank participants, Finteum plans to develop a second wave of banks that are set to go live on the platform, with incentive structures being in place when the announcement was made.