CSDR Client Concerns Part 1: Pre-matching & Returns

Returns are one of the most impacted trade flows as a consequence of CSDR, and the importance of timely settlement has increased dramatically as talk has turned to how these will be managed under the regime. Returns volume has significantly increased with market growth and returns the most problematic trade flow to settle: shape mismatches, incorrect SSIs, manual processes, lack of inventory and late-booked trades all contribute to inefficiencies.

The practice of processing returns manually via email and telephone does persist and creates deeper inefficiencies for clients and their counterparties as these are time consuming to book, often introduce new opportunities for mis-bookings and subsequently increase the chances of failure dramatically.

With multiple interconnected solutions, EquiLend offers a number of options available to better manage returns including EquiLend Settlement Monitor and EquiLend Exposure. Clients can choose to submit returns directly into our platform via the simple OneFile upload process to reduce these issues. Our solutions provide clients the opportunity to take advantage of STP processing and late cut-off times for accepting returns.

EquiLend’s automated returns product enables clients to confidently book same-day returns as late as up to 30 minutes before market cut-off time. Clients can be confident that the booking will be correct, accepted and instructed, delivering both financial and reputational benefit. Borrowers will not incur costs for unnecessary over borrows, and lenders will not be penalized for late matched or failing trades. What results is a true benefit in any process, and financially beneficial under CSDR.