Enhancing the process

As COVID-19 has unearthed some of the inefficiencies and problems in the financial services space, industry experts discuss the current challenges in clearing and settlement and how these processes can be enhanced

The global pandemic has shaken up many industries and has caused market volatility in the financial services space. In particular, this has shone a light on the inefficiencies in clearing and settlement and has amplified the need for an enhanced process in this space.

Clearing is the procedure where financial trades settle, which encompasses the transfer of funds to the seller and securities to the buyer. Clearing is necessary for the matching of all buy and sell orders in the market. The payment and settlement space covers processes including cash flow gener- ation, confirmation of the amounts between participants, netting, payment instruction and settlement management. Industry experts note that this is usually a very onerous set of manual tasks that lacks standardisation and centralisation.

In this regard, industry experts from Clearstream, LCH, FIX, and OCC discuss the challenges in this area and where the opportunities lie, and how tech- nology can help to enable a more streamlined approach. Read the full article here