Wilco adds support for European CCP netting and Japanese margin trading

Wilco adds support for European CCP netting and Japanese margin trading

Wilco International, a subsidiary of Automatic Data Processing, has added a range of netting features to its Gloss trade processing and settlement system for central counterparty processing within Europe.

Gloss now supports central counterparty netting through the CrestCo, London Stock Exchange and London Clearing House service, Euronext Paris, Euronext Amsterdam and Borsa Italiana. Wilco says it is analysing requirements for other planned CCP services in Europe.

For the CrestCo, LSE, LCH service, Gloss supports direct clearing via Wilco’s Crest adapter. Bought trades are netted against sold trades at instrument level within Gloss, and an overall net settlement instruction is sent to Crest at close of business on trade date. For Euronext and Borsa Italiana, Gloss follows the convention of aggregating all bought trades together and all sold trades together prior to transmitting net instructions via Swift to clearing custodians.

Seperately, the vendor has also added a new module for Japanese margin trading - the latest in a range of new functional developments specifically for the Japanese market.

The new module - available as a stand-alone package or integrated with Gloss - handles all aspects of transaction processing for margin trading, from trade capture to settlement and accounting, says Wilco. It includes management features for daily loan and cash movements with the Securities Finance Corporation (SFC); collateral calculations and daily margin call corrections; and ‘what if’ simulations for positions pending closure. Corporate actions support is also provided for Japanese margin trades. Settlement, revaluation and charging all take place at the transaction level, in accordance with Japanese norms.

Development was carried out at Wilco’s international development centre in Hyderabad, India, with support from the Tokyo office for interfacing requirements. The first user is expected to commence live operations during Q4 of 2002.

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