Bilateral Fail and Netting Management: new features for TeleClearing
Since June 28 is in effect the new regulation on EuroTLX, drafted according to the Consob guidelines on Multilateral Trading Facility (MTF), with amendments related to the new management of Fail flows and to the Bilateral Netting project, which allows the aggregation of settlement instructions corresponding to contracts executed on EuroTLX segment, characterized by regulation on Euroclear and Clearstream..
The new model of Netting allows for the communication of the individual EuroTLX market contracts to Monte Titoli, which carries on the merger and the transactions reporting to CSD's and members, respectively by sending SWIFT MT541/MT543messages and requests of ROM.
The CSD’s's communicate status updates (settled / fail) to EuroTLX and members, which, in agreement with counterparties, delete the old operation and include two or more new instructions in order to settle part of the original transaction. In addition, the member receives a stream of FAIL transactions by EuroTLX, marked as critical (where the settlement date is equal to or less than 2 days from the date of receipt). For each FAIL transaction reported by EuroTLX the member must notify the information about the new transactions created (OTC) and their settlement state in the return flow.
TAS integrates TeleClearing platform with all the new features designed to:
• link the information from X-TRM service on the operations to be settled (merged contracts)
• manage the Fails flow from EuroTLX containing the list of operations considered critical ( the status of critical operation is attributed by EuroTLX on the base of an algorithm that takes into account some factors that determine systemic risk in terms of settlement)
• aggregate reports of settlement / fail of CDS's.
TeleClearing also allows to link together chains of transactions originated from an original (Fail) and immediately check that the transactions created are consistent in terms of quantity and equivalent with that to which they refer, thus simplifying the management of the whole chain of processes linked to the reduction of the risk of infection
