Financial technology firm Capitolis has introduced new technology to reduce the time and resources needed for banks, brokers, and hedge fund firms in approval processes. The company announced today that it has achieved a milestone in executing same-day tear-ups for FX options.

Efficiency in FX Options

This technology reportedly reduces the time and costs needed by banks, prime brokers, and hedge funds in the approval process. Traditionally, completing a novation tear-up, a term referring to terminating or canceling an existing contract and replacing it with a new one, could take up to 10 days due to the manual approval steps involved.

Capitolis' new technology aims to lower this time down to T+1 or better for up to 70% of all novations. Working in collaboration with several prime brokers, executing banks, and major hedge funds, Capitolis has designed and rigorously tested the fast-track technology.

The new system is reportedly fully operational and available to all participants on the Capitolis platform. Last year, Capitolis expanded its novation product to include agency flow, allowing for the automation of agency novation while maintaining participant anonymity.

Gil Mandelzis, CEO and Founder of Capitolis highlighted the platform's impressive progress: “Capitolis had already made tremendous strides in reducing market risk, enabling more novations, and enhancing balance sheet efficiency for our participants. Over the past year, we've seen a nearly 50% increase in volume on the platform and added many new FX prime brokers, executing banks, and significant buy-side participants.”

Removing Capital Constraints

This expansion added momentum to the novations platform, enabling it to onboard most major buy-side and sell-side market participants by the end of 2023. Capitolis aims to ensure financial markets work for everyone by removing capital constraints and providing greater access to diversified capital and investment opportunities.

Combining advanced technology with deep financial expertise, Capitolis develops innovative financial solutions that drive growth for global and regional banks and institutional investors. The company enjoys robust backing from top venture capital firms and leading global banks, including JP Morgan, Citi, and State Street.

Last year, Capitolis disclosed plans to expand its novations platform. This new platform, which seeks to optimize investors’ portfolios by replacing existing contracts with new ones, has reportedly added key buy-side and sell-side market players. The platform aims to enhance the needs of prime brokers, executing banks, hedge funds, and money managers.