Barclays and UBS have joined Traiana’s OTC equities clearing platform, which the firm says will significantly bolster its efficiency.
The two bank have joined the Harmony CCP Connect platform, which looks to offer netting benefits to market participants through the automated central clearing of OTC equity trades.
Traiana said it already has a number of major equity broker dealers using Harmony, including Credit Suisse, Deutsche Bank, Instinet and JP Morgan.
It said adding more banks helps improve the efficiency of the system and could save the equities market as much as $30 million per year.
“This is the result of a combination of effects including reduced volume of trades requiring bilateral settlement, reduced fail trades and reduced borrowing, funding and margin costs as a result of decreased settlement volumes,” said Traiana. “Harmony CCP Connect plays an important role in reducing counterparty risk and increasing transparency.”
It added that OTC equity markets have traditionally seen high error rates due to bespoke, labour intensive processing, however Harmony has been able to achieve a 95% success rates for netting and clearing trades where both brokers are connected to the platform.