J.P. Morgan and Citadel Adopt truePTS Post-Trade Derivatives Processing Solution

Blog entry

By Uri Inspector, Staff Reporter

truePTS is addressing the challenges of post-trade derivatives processing with its ‘no touch’ automated solution. Early adopters J.P. Morgan and Citadel are using the cloud-based platform as a lower-cost, digital alternative to legacy confirmation providers.

The solution offers real-time synchronised connectivity between all participants in the post-trade environment through an application programming interface (API), as well as fully-integrated confirmation, allocation, sending, clearing and workflow reporting for the derivatives market as a whole. A 'no touch' process eliminates the need for trade affirmation while providing an instant clearing status for dealers, buy-side firms, inter-dealer brokers and clearing houses.

This avoids the need for brokers to employ considerable manpower to process parts of a given derivatives trade and instead automates processes to provide full representation of trades, match front-to-back trade flows, and reduce operational costs.

truePTS’ AI-enhanced deal capture, auto-affirmation and direct to clearing workflows also lower costs and increase efficiency for voice trades.

Zohar Hod, CEO of truePTS, says the platform is geared to ‘solve the biggest issue of the industry, which is standardisation’. Regulations since the late 1990s, including MIFID II, require a move towards standardisation and agreement on full representation of a trade. Looking forward, Securities Financing Transactions Regulation (SFTR), which is due to take effect in 2019, demands that both sides of a trade need to report funding costs and collateral charges on any transaction. With incumbent legacy platforms, adapting to standardisation is complex and inefficient, problems that can be solved by adopting the truePTS solution, which is continuously updated to support the latest regulatory revisions.

Commenting on the truePTS solution, Dan Dufresne, global treasurer at Citadel, says: “In recent years, derivatives trading has migrated to electronic venues, which has significantly improved execution workflow, but post-trade processing for many of these instruments still relies on legacy technology resulting in inefficiencies downstream. The truePTS offering will improve post-trade efficiency, decrease costs, and reduce operational risk.”

truePTS established strategic relationships with J.P. Morgan and Citadel in December 2017, with the goal of addressing regulatory pressures, as well as the high costs of post-trade derivatives processing. November also saw citibank adopt the solution. With J.P. Morgan and Citadel participating in the platform’s launch for the buy-side this week, Hod says there are more than a dozen large dealers coming onboard. He comments: “The more people on the network, the more efficient the post-trade environment will be.”

Kieran Hanrahan, global head of markets middle office at J.P. Morgan, concurs, saying: “Buy-side firms’ participation will be critical to the scalability of the truePTS platform.”

Hod adds: “With the NEX group being recently acquired by CME and leading post-trade processor MarkitSERV up for sale, truePTS’ main competitors are failing to offer clients the same level of comfort at this time of uncertainty in the derivatives market. We will be the catalyst that provides transparency, mitigation of needed resources, and lower costs for our clients by leveraging progressive technology to automate workflows and comply with regulatory change.”