The Importance of Automating SSIs in a T+1 Environment

The Importance of Automating SSIs in a T+1 Environment: Enhancing Efficiency in Securities Finance

In September 2023, EquiLend partnered with SSImple, an innovative FinTech, to launch a reimagined Standing Settlement Instructions (SSI) Repository. SSImple specialises in automating SSI solutions to advance compliance with stipulated FMSB, ESMA, and FCA requirements, supporting the industry’s shift to T+1 settlement. Its software-as-a-service (SaaS) platform, which was built using distributed application platform Corda from R3, is transforming how SSIs are stored, shared, and enriched across global financial markets. This cutting-edge technology powers EquiLend’s Enhanced SSI Repository and Management Solution.

The Challenges of Manual SSI Management

The traditional SSI management process is manual and prone to errors, requiring constant coordination and interaction with counterparts to ensure accuracy. This creates bottlenecks, which can be costly under the accelerated timelines of T+1 settlement. Historically considered a back-office function, SSI management now requires a broader focus across front, middle, and back offices to prevent trade failures and ensure compliance with the faster settlement cycle.

Since the launch of the Enhanced SSI Repository, 21 clients have successfully adopted the solution, immediately benefitting from reduced instances of incorrect or inconsistent SSIs. These errors can result in failed trades, missed settlements, and additional costs–challenges that are significantly magnified under a T+1 environment.

Benefits of Automated SSIs

Automation plays a critical role in meeting the demands of T+1 settlement by enabling faster, more reliable trade processing. Key benefits include operational risk reduction and enhanced trade lifecycle efficiency. By eliminating manual entry and validation, the risk of mismatched or incomplete instructions is minimised, reducing settlement fails and the associated costs.

Automated solutions like EquiLend’s Enhanced SSI Repository, powered by SSImple, facilitate real-time updates and validation of SSIs, ensuring accurate and consistent data throughout the trade lifecycle. This enables faster settlements and improves data integrity, creating a seamless pre-settlement matching process that reduces the need for costly callbacks to resolve discrepancies.

Incorrect or outdated SSIs contribute to roughly 30% of settlement failures. SSImple’s automation technology addresses this challenge by continuously validating SSI data against industry standards, such as ISO standards, and providing real-time updates. This ensures accurate pre-settlement matching, allowing counterparties to experience frictionless settlements aligned with T+1 requirements.

Driving Competitive Advantage

Automated SSI management reduces operational risk, enhances efficiency, and eliminates the manual interventions that slow down the settlement process. By leveraging automation, firms can achieve next-day settlements with confidence, gaining a competitive edge in a rapidly evolving financial landscape.

The importance of automating SSI’s for T+1 Settlement

With the shift to T+1 settlement, the way we manage Standing Settlement Instructions (SSIs) is under the spotlight.

For years, manual SSI management has been a back-office task, but as securities finance moves to a T+1 world, this process has far-reaching impacts across front, middle and back offices where outdated or incorrect SSIs can cause bottlenecks that lead to failed trades, missed deadlines and unnecessary costs. Manual processes just can’t keep up.

The Importance of Automating SSIs in a T+1 Environment