World's fastest clearing solution finds first customer

After analyzing major challenges facing the post-trade industry, Cinnober launched TRADExpress™ RealTime Clearing, in the firm belief that this will be the next paradigm shift for the clearing industry. The first order is in, and more customers are expected to follow.

The post-trade industry is facing substantial challenges, ranging from increasing high frequency trading to the ongoing debate regarding new regulatory measures and increased competition between clearing venues. Earlier this year Cinnober proudly announced the first customer for its clearing and risk management offering, TRADExpress Real­Time Clearing. Building on Cinnober’s proven trading platform, this system brings a new level of performance and flexibility to the clearing and settlement process for any instrument or asset class. The customer wishes to remain anonymous at this time.

A paradigm shift

“Real-time clearing is a paradigm shift for the clearing industry,” says Nils-Robert Persson, Executive Chairman of Cinnober. “We’re talking about true real-time risk management where calculations are performed in milliseconds, instead of running batches minutes or hours afterwards. Talk about change.”

“This is the world’s fastest clearing system, and it brings a totally new level of flexibility for clearinghouses to rapidly respond to new regulations, client needs and market requirements, with full control of risk at any moment.”

Calculating risk in real time means that a new risk measure is calculated and published for each trade. Risk measurement can also be done before entering an order, minimizing the risk of defaults. The system covers traditional multilateral clearing as well as bilateral clearing between two members, allowing the clearing venue to serve clients with different demands on a single system.

State-of-the-art flexibility

‘The flexibility of the system stems from an innovative member and account structure as well as a state-of-the-art plug-in architecture, making it possible to expand the system with such things as new products, risk models and algorithms with short time to market. The system can run several risk algorithms in parallel, and it is possible to add algorithms as needed. This enables optimal risk control with thorough stress testing, and the use of different algorithms for different instrument groups or, for example, on an inserted order vs. a trade.

“Legacy clearing systems are clearly not able to match the flexibility and functionality required,” adds Persson, “so other customers are sure to follow.”