Insight
EquiLend Risk Resolution Suite (R2S):
Resolving Risk, Settlement and Returns
CJ Emson
January 2024
EquiLend Risk Resolution Suite (R2S):
Our latest development in Post-Trade Solutions addresses a shift in focus we have observed in clients and across the wider industry, to better understand and calculate individual risk across the post-trade lifecycle. This trend towards greater ownership and accountability in post-trade execution began with the introduction of SFTR and has doubled down with CSDR, the impending SEC 10c-1a rule and the confirmed move to T+1 in the U.S and Canada.
Clients are increasingly seeking out ways to de-risk, simplify and speed up existing processes, connecting the dots to minimize effort all the way through the lifecycle; from front office to back office and maximize output. Our latest development, the Risk Resolution Suite, affectionately known as R2S, encompasses enhanced post-trade connectivity and functionality which is beneficial in identifying and reconciling risk in recalls, returns, settlement and SSIs.
Gabi Mantle, Head of Post-Trade Solutions, commented:
“Highlighting intra-day risk was a key focus for us when designing and launching our new Risk Resolution Suite (R2S). Regulatory pressures from CSDR in 2022 and the upcoming move to T+1 in the U.S. and Canada —with the EU and UK actively discussing following suit— have both created a shift in post-trade processing. Post-trade exceptions and risk resolution is no longer seen as a back-office problem, and trading desks want better oversight and the ability to manage their risk. R2S comprises Recalls, Returns and Settlement tools that will help users identify, action, and prevent risk items from impacting P&L while directing resources towards the highest priority exceptions and streamlining previously manual, time-consuming processes.”
What is R2S: Risk Resolution Suite Explained
All-new EquiLend Risk Resolution Suite (R2S) includes the Recall Notifications, Return Notifications and Settlement Monitor solutions all in one place, designed to facilitate seamless connectivity, monitor intra-day risks and streamline data across all three global solutions within a single user interface.
Where previously each of these tools were accessible via individual user interfaces (UIs), centralization of these functions ensures oversight of issues arriving from any one avenue can be identified and resolved easily.
Additionally, we have redesigned the workflows for Recalls and Returns offering greater risk identification and more options for on-screen action to mitigate those risks identified.
All-New EquiLend Recalls
As part of R2S, EquiLend’s robust Recalls platform has a brand-new look with a redesigned UI showcasing enhanced options for on-screen actions. The intuitive workflow tool facilitates real-time recalls tracking & monitoring.
The tool offers multiple connectivity options to both initiate and receive recall notifications, including instant MQ Messaging, initiation via recall screen or bespoke recall uploads.
The new Recalls hub, within R2S acts as a truly global hub for recall distribution and updates for EquiLend-to-EquiLend participants with additional connectivity to DTCC ARMS and TMX. The tool also allows communication to non-EquiLend participants via our Recalls lite offering. Within the new Recalls functionality, we offer full STP capabilities for all Recalls delivering wide ranging benefit to both lenders and borrowers.
Ensuring the inherent link between Recalls and Returns is accounted for in the intuitive workflow tool, linking recall notifications to returns bookings, enables users to specifically track returns linked to recalls.
Firms gain full flexibility to set up bespoke recall rules within the platform to manage recalls including the setup of bilateral market cut offs per recall relationship. The tool offers further embedded warnings on recalls for shortened settlement cycles and recalls sent below MTAs, providing users all the key metrics needed to manage these events.
All-New EquiLend Returns
Also now incorporated within R2S is the redesigned Returns UI which complements the existing powerful return notifications and processing platform with new functionality designed to pinpoint risks and facilitate greater collaboration between counterparties.
Borrowers can hand-off tasks throughout the return lifecycle for seamless returns management and clear risk resolution within the redesigned workflow, in addition to automated technology offering users a consistent view into the latest status of returns messages between the borrower and lender.
Settlement Monitor
Settlement Monitor is an essential tool for identifying post-trade execution discrepancies with global capabilities for pre-matching, settlement risk resolution and fails management. Drawing on the interoperability EquiLend prides itself on, Settlement Monitor offers a centralized view of all intra-day activity with real-time feeds taken from EquiLend Exposure, SSI Repository, Recalls, Returns and Unified Comparison.
As an engine, it identifies booking errors, showcases indicative penalties and inaccurate settlement instructions to provide a single view of risk and provides the tools to mitigate and resolve those risks. Additional functionality includes automated trade rebooks which are reconciled and matched on-screen and fed into the user’s system.
Within Settlement Monitor, clients can see the calculation of indicative CSDR penalties for all trades in scope, tracking market cut-offs while highlighting the riskiest trades for prioritization, reducing risk and minimizing workload downstream.
Across the R2S interface clients can access the latest trade data across Recalls, Returns and Settlement Monitor centrally, with seamless connectivity across tools and unrivaled capabilities for risk identification and resolution globally.
Contact [email protected] to discuss a demo and to learn more.
Who We Are
EquiLend is a global financial technology firm offering Trading, Post-Trade, Data & Analytics, RegTech and Platform Solutions for the securities finance industry. EquiLend has offices in North America, EMEA and Asia-Pacific and is regulated in jurisdictions around the globe. The company is Great Place to Work Certified™ in the U.S., UK, Ireland and India and was named Best Post-Trade Service Provider Globally, Best Market Data Provider Globally and awarded for its Diversity & Inclusion in the Securities Finance Times Industry Excellence Awards 2023.
