Traiana’s ClientLink for Periodic Payment Messaging service allows clients to more efficiently send and receive data in real-time between market participants, transform it into their preferred messaging format, and facilitate the matching of cashflow details across all asset classes. As an add-on product, we have the Periodic Payments Matching service which offers all the functions of the messaging service, but with a real-time matching engine to centrally match and agree/disagree to cashflows.
We have defined periodic payment as a cashflow that isn’t known at the point of trade confirmation or a lifecycle event that historically has sat outside the trade confirmation process. Good examples of this are reset payments, coupons, dividends and interest. The products we have currently support 71 different payment types that follow the ISITC standard cash codes.
As part of the trade lifecycle, a trade ultimately needs to settle. Cashflow amounts, triggered through a number of lifecycle events, must be agreed upon/confirmed between the market participants, and the current process has remained largely inefficient for years. Up until now, there has been a lack of standardization and centralization, and even regulatory bodies such as Basel III and CDSR have put focus on settlement processes, recognizing that safety should be ensured. For example, the CSDR settlement discipline regime will impose financial penalties on failed settlements. The FIX Trading Community launched the first set of standards for periodic payment messaging, and by doing so, released a common set of data points to be used, in real time, to allow for far greater levels of automation.
We currently offer two services:
Periodic Payment Messaging ‒ A real time, bi-directional transformation service with validation on the inbound data. Firms can use their own messaging language, their own connectivity choice, and can send and receive details relating to upcoming cashflows, including the SSIs, and can use this for the 71 different cashflow types. For the flow, we look at this as two parties. The flow can be buy-side to dealer, buy-side to PB, dealer to dealer, etc.
Periodic Payment Matching ‒ The matching service gives users central matching functionality, complete with a UI that can be accessed by staff across your organization. The matching runs in real time and can be tailored to match across specific fields, allowing for rounding rules, tolerances, and even flagging of imminent and stale status cashflows. The service can provide the status either via real-time notifications or via the UI.
Both the Periodic Payment Messaging and Periodic Payment Matching services support cross-asset cashflows. There are a host of different types of organizations who can connect to the product including asset managers, hedge funds, prime brokers, FCMs, executing brokers, and fund admins/outsource providers.
The current process is mostly manual with a very fragmented workflow that is not consistent cross asset. The cost is high to support, has low STP, and takes several days to manage and agree to cashflows.
A host of operational efficiencies are made possible by our truly cross-asset platform that allows firms to ledge or match cashflows through a set of standards in their own formats and connectivity choice ‒ in a central, fully open access location.
As a participant you can use the messaging and data format of your choice for both inbound and outbound flows. We support FIX, CSV, XML, and FpML and have sFTP or MQ as connectivity options. We do all the heavy lifting by transforming your data into the format of your counterparty for the messaging service. For the matching service, we transform and then route this to the matching engine where we have a UI available as well as real-time notifications. For existing Traiana clients, there is also the option to reuse existing connectivity ‒ making this even quicker to onboard to.
Both services support both real time and batch. If the batch job was on one side of the cashflow and the counterparty was doing real time, then there would be the potential for some trades to sit in a “stale” status for a period of time. However, the timing on when they turn stale, as well as other statuses like imminent, is customizable based on time from receipt.
Both the messaging and matching platforms offer real-time notifications. You may have already seen this in Traiana across our allocation/confirmation services. You don’t need to monitor UIs if you want it fed into your own internal systems to achieve higher levels of STP.
The pricing structure for both the Periodic Payment Messaging and Periodic Payment Matching products are volume-based and work on a line item basis. Each line item of data, whether received in individual messages or a batch-based file, will constitute a line item.
A line item is applicable for all NEW and AMENDS. CANCELS, ACKS, and NACKS (as well as matching status messages) do not count as an additional line item. If you are a user of the messaging-only service, then you will be charged only for the line items that are received and transformed. If you use the matching service, then each message that is part of a matching event is billable. For more information on pricing, please reach out to our Sales teams.
We support both single cashflow vs. cashflow, as well as a “many to one” match. This effectively nets the single cashflows into one figure and matches against the other side. If there is any rounding and/or tolerance involved, we will send back the total matched figure and adjust the largest amount of single cashflows to represent the difference.
Yes, the service supports cashflow affirmation if your counterparty submits their side of the cashflow. For example, an IRS coupon is submitted by your broker but you do not have the ability to connect to the platform or have the ability to calculate the cashflow. You can either receive via STP the messages to accept, reject, or dispute or you can manage this via our user-friendly UI.
The services officially launched in Q3 of 2020, and we’ve obtained significant early stage traction in both our messaging and matching services across OTC, equities, and fixed income flows on 14 different currencies. We have prime brokers, executing brokers, and large buy-side institutions using our messaging and matching across OTC, equities, and fixed income cashflows ‒ which further complements Traiana’s suite of post-trade products.
Traiana’s Equities Swaps Lifecycle Management (ESLM) service allows participants to centralize and standardize their daily equity swaps reconciliation of daily trades, valuations, and cashflows. As part of this service, there is functionality that utilizes the periodic payment matching engine in the same way it can be used more widely across all the other asset classes.
Integrations are determined by the connectivity and data format that fits best for your operating model. Simple, single file data format integrations can be done in four to six weeks, and we offer full end-to-end testing capabilities as part of the integration. For more information on what an onboarding looks like, please contact our Sales teams.