In other news, Eventus has a new client in Australia, and Quantile and LCH ForexClear launch an FX clearing service.
HSBC Collaborates with Metaco
HSBC officials recently announced that the international bank will launch a digital assets custody service for institutional clients that invest in tokenized securities.
“Once live in 2024, HSBC’s new digital assets custody service will complement HSBC Orion, the bank’s platform for issuing digital assets, as well as HSBC’s recently launched offering for tokenized physical gold. Together, these form a complete digital asset offering for HSBC’s institutional clients,” according to the official announcement.
To facilitate the launch, HSBC is collaborating with an enterprise technology provider Metaco and will use its institutional platform, Harmonize, “as part of HSBC’s new custody service for digital assets. Metaco’s Harmonize solution helps unify security and management of digital asset operations,” officials say.
“We’re seeing increasing demand for custody and fund administration of digital assets from asset managers and asset owners, as this market continues to evolve. Through key partnerships, HSBC is delivering the next-generation custody infrastructure that will be scalable and secure. For asset servicers, there has never been a more important time to innovate, to collaborate and to create change,” says Zhu Kuang Lee, chief digital, data and innovation officer, securities services, HSBC, in a prepared statement.
FinClear to Use Eventus for Post-Trade Surveillance
FinClear Execution and Clearing Services, based in North Sydney, Australia, has deployed the Validus trade surveillance and post-trade monitoring system from Eventus, officials say.
FinClear is a wholesale provider of execution and clearing services to brokers, wealth advisers, and financial technology companies, officials say.
“FinClear touches one in two retail transactions in Australia, clearing and settling AU$360 billion in transactions each year. The company hosts more than AU$145 billion of listed assets on its existing platform and supports more than 570,000 accounts. It services more than 250 wholesale intermediaries,” according to the Eventus announcement.
FinClear moved to Eventus “from its previous provider for a number of reasons, including the ability to customize the platform,” according to the announcement.
“Eventus gave us the opportunity to tailor Validus to the specific needs of Australia’s equity markets. Since deploying the platform, we’ve already seen a marked reduction of false-positive alerts, and we’re now picking up behavior that we wouldn’t have captured previously,” says Andrea Marani, CEO of FinClear Execution and Clearing Services, in a prepared statement.
Marani adds that “there have been severe penalties imposed on brokerage firms” for not reporting suspicious activity daily to regulators. “These responsibilities continue to increase, and Eventus software will be an essential tool to assist in managing these responsibilities,” she says.
The Validus platform can be deployed for equities, options, futures, foreign exchange (FX), fixed income and digital asset markets.
Clearing Service Launces for FX Transactions
A clearing service for foreign exchange (FX) forwards, dubbed FX Smart Clearing, has launched via Quantile and LCH ForexClear, which are LSEG Post Trade businesses, officials say.
“Quantile and LCH ForexClear will be offering regular FX Smart Clearing runs from early 2024 for FX Forwards, with other cleared products to follow,” officials say.
The new service “enables participants to selectively clear FX Forwards via LCH ForexClear to significantly reduce capital requirements and counterparty risk,” officials say. Quantile offers initial margining (IM) optimization and risk reduction support.
The service is intended to serve demands for solutions that “simultaneously manage counterparty risk, initial margin and capital,” officials say.
The system selects “existing uncleared trades to move to LCH ForexClear, and optimizing portfolios with new rebalancing trades to reduce counterparty risk and the financial resources a participant must hold,” according to the announcement. “The optimization can be fully customized, enabling participants to control their risk and resource changes, as well as their preferred currency pairs and trading partners. Portfolios can also be potentially compressed to significantly reduce trade count and notional.”
FX Smart Clearing was developed in response to customer demand for solutions that simultaneously manage counterparty risk, initial margin (IM), and capital. The introduction of SA-CCR has increased capital requirements for FX which creates a new incentive to clear, assuming the differences in cleared and uncleared IM are appropriately managed.
Before the new service went live, Quantile and LCH ForexClear conducted several Proof of Concept (PoC) runs that demonstrated the significant potential of the service, officials say.
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