BNP, HSBC, RBS sweeten Traiana’s Harmony CCP Connect offering

By:
Russell J. Dinnage
Published on:

BNP Paribas, HSBC and RBS have begun using Traiana’s client clearing solution Harmony CCP Connect to reduce client over-the-counter (OTC) FX trading costs.

The three banks join Bank of America Merrill Lynch, Citi, Deutsche Bank, JPMorgan, Morgan Stanley and UBS in using the CCP Connect service to manage workflow required to clear OTC FX derivatives. The banks signed agreements with Traiana to use the service in March.

The Harmony CCP Connect service enables the banks to managing the clearing process for OTC products with their clients, counterparties and clearing houses.

It is seen as a solution for reducing client costs associated with complying with new FX derivatives regulations. Initially, this will mean helping to clear non-deliverable forwards.

Jacqueline Liau, HSBC global head of product and services for FX prime, says HSBC’s use of the Traiana services means clients can rest safe in the knowledge their FX trades will be in compliance with new regulations globally.

And Steve Ramsden, RBS global head FX prime brokerage and CCP clearing, adds that connecting to Traiana means clients trading OTC currencies products can "immediately reach the key clearing houses, trading venues, post-trade platforms and market participants".

"This will reduce the risk and complexity associated with implementing OTC clearing in the timelines required by regulations," says Ramsden.

Traiana Harmony CCP’s services are not specifically regulated by the Commodity Futures Trading Commission rules under the Dodd-Frank Act, but the platform is acting as a third-party technology agent under the act.

Leading interdealer FX brokers Thomson Reuters and EBS signed agreements to use Traiana Harmony CCP Connect earlier this month.

Their connectivity to CCP Connect gives market participants access to all clearing houses registered to clear OTC FX trades.

And the connectivity provides counterparties with an additional degree of confirmation and verification of each trade by notifying them when the trade is sent to the clearing house through Traiana’s systems.

The CCP Connect business is positioned as a service that market participants can use to reconcile differences in new trading regulations in the US and EU, as well as existing regulatory mandates in Asia.

The platform will also help the banks using it to manage the increasing array of clearing houses and trade repositories entering the market globally.

Traiana CEO Andrew Coyne says the CCP Connect service is committed to working with all FX market participants to ensure they have the ability to adapt to evolving global regulations.

"As the FX industry continues to work together to implement US and European regulatory reform, we are excited to add [BNP, HSBC and RBS] to our OTC clearing initiative," says Coyne.