Clearstream Introduces Tools to Predict Settlement Failures, Increase Efficiency

Clearstream, one of the world’s largest settlement and custody firms for domestic and international securities, has launched new tools to help its clients predict settlement failures and increase settlement efficiency and liquidity for the entire market.

The tools are the Settlement Dashboard, tools to be used to look into past and present settlements and the Settlement Prediction Tool, which is an artificial intelligence-powered technology that provides insight into future settlements.

These data-based solutions will aid in “optimizing the settlement life cycle,” said the subsidiary of Deutsche Börse Group, the German operator of multi-trading venues.

Clearstream announced the launch of the tools on Monday on its website.

The introduction of the tools comes a few weeks after Clearstream launched its own collateral management tool, Own Selection Criteria with Automated Reasoning (OSCAR).

The subsidiary firm explained that the Settlement Dashboard was designed to supply clients with detailed information on their settlement activity, including efficiency and failure analysis.

This feature will enable them to monitor their settlement activities, check daily for potential impact and benchmark against their peers.

On the other hand, the Settlement Prediction Tool can give prediction projections on settlement trades due in two business days’ time.

“Users can leverage the artificial intelligence-powered tool to minimize late settlement penalties and to maximize value of their assets by allocating them accordingly,” Clearstream explained.

SDR and Settlement Failures

According to the Luxembourg-headquartered international central securities depository (ICSD), the enforcement of the Settlement Discipline Regime (SDR) has made the tools necessary.

The ICSD explained that market participants are currently searching for how to further improve their settlement efficiency and liquidity.

The SDR, the European Union (EU) securities settlement efficiency regulation, came into force in February and is being implemented across countries of the EU.

The regulation sets the penalties for failed trades and the strict rules for increased safety and efficiency of securities settlements.

Clearstream believes its new solutions are the gamechanger.

“With Clearstream’s new data solutions, clients’ operations can leverage these predictions throughout the day to gain additional validation and to take appropriate actions to prevent any potential settlement failures, thereby accelerating settlements,” the ICSD said.

Furthermore, Clearstream noted that the interactive visualization feature of the Settlement Dashboard will provide clients with a view of critical markets, asset classes and counterparties.