Clearstream, a subsidiary of Deutsche Börse Group, has launched the settlement dashboard and artificial intelligence (AI)- powered settlement prediction tool, to offer insights into past, present and future settlements.
The Luxembourg-based international central securities depository (ICSD) said market participants are searching to improve their settlement efficiency and liquidity with the Settlement Discipline Regime (SDR) which is coming into force in February.
The SDR is a central plank of the Central Securities Depositories Regulation (CSDR). It aims to improve the safety and efficiency of securities settlement, particularly for cross-border transactions, by ensuring that buyers and sellers receive their securities and money on time and without risks.
The SDR provides for a set of measures to prevent and address failures in the settlement of securities transactions or settlement fail which include cash penalties, mandatory buy-ins and monitoring and reporting measures to be taken by the CSDs.
Clearstream’s new data solutions will enable clients’ operations to leverage these predictions throughout the day to gain additional validation and to take appropriate actions to prevent any potential settlement fails, thereby accelerating settlements.
The settlement dashboard offers clients insights on their settlement activity — including efficiency and failure analysis.
This allows monitoring of settlement activity, assessing the potential impact on a daily basis and benchmarking against the market.
The settlement dashboard offers clients insights on their settlement activity — including efficiency and failure analysis — allowing for monitoring of settlement activity, assessing the potential impact on a daily basis and benchmarking against the market.
The settlement prediction tool forecasts the probability that a specific instruction will settle on time, up to two business days in advance.
Users can also leverage the AI powered tool to minimise late settlement penalties and maximise the value of their assets by allocating them accordingly.
“Our predictive and prescriptive solutions provide insight and foresight that help our clients make better decisions that improve their performance and business growth,” said Priya Sharma, head of data & connectivity at Clearstream.
She added, “Most failed settlements happen due to lack of detailed knowledge of one’s own settlement activities. By leveraging high-quality predictive data, we provide our clients with that knowledge to be best equipped for regulatory requirements, operational excellence and settlement efficiency.”
Clearstream clients can use the service free of charge during the trial period from July to September 2022.
Last month, the ICSD released its own selection criteria with automated reasoning (OSCAR) solution, which saw the application of AI to accelerate its advances in collateral management automation.
