With the new generation environment, Clearstream now treats all the steps of the transaction life cycle which impact the efficiency of the market on a real-time basis. The scope of services benefiting from the change includes not only settlement itself, but also instruction validation, matching, domestic market instruction handling and feedback, instruction sequencing, provisioning, collateral allocation and substitution and customer reporting. The new generation provides customers with an ideal environment in which to optimize securities movements and collateral throughout the daytime processing period from 4:30 to 18:00 CET. Customers benefit from an accelerated and more efficient settlement processing without queuing times, and a reduced need for credit and collateral. The real-time settlement includes cash netting, securities netting and securities financing supporting the market in meeting the demands of the fast-expanding lending and repo market.
Settlement deadlines have been improved for securities in 36 domestic markets worldwide. As there are two or three different deadlines per market, overall 98 deadlines have been improved. Cash instruction deadlines have also been improved for 26 currencies including the euro deadline via TARGET2 and corporate action processing in domestic markets has been upgraded.
Customers will have no migration cost and no change of communication interface as the system runs on Clearstreamâs Creation Settlement engine. With instruction management information immediately available across multiple communication channels, they will be able to monitor pre-settlement transactions and take action to ensure timely settlement. The new generation significantly improves the service levels for all securities processed (equities, bonds, investment funds, certificates, commoditiesâ¦).
Jeffrey Tessler, CEO of Clearstream, said: âThe unique feature of Cleartsreamâs new offering is that it brings the benefits of real-time processing to all aspects of the transaction life cycle. The successful launch of the latest generation of Creation demonstrates Clearstreamâs commitment to interoperability and to raising the level of market efficiency.â
Settlement is the operation that ensures that cash and securities are promptly and effectively delivered between trading parties. As market participants operate 24 hours a day and 7 days a week settlement operations follow a life cycle with day time operations and night time operations. In 2007, Clearstream seamlessly settled over 470,000 transactions in its systems every day.