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EMCF selects Swift for settlement obligation messaging

28 January 2010  |  2511 views  |  0 Source: EMCF

EMCF has announced that it will provide settlement obligation messaging to its clearing participants via Swift.

By using this standardised format EMCF will conform to European market-practice harmonisation initiatives and will reduce operational risks and costs.

From 26 March, SWIFT/EMCF customers will be able to reuse their existing SWIFT connection to receive the settlement obligations for EMCF's Central Counterparty (CCP) clearing in cash equities.

After the netting process, EMCF will mirror the settlement instructions addressed to the domestic Central Securities Depositaries (CSDs) to both general and direct clearing participants. Message types are MT540, MT541, MT542 and MT543. These instructions are determined by the clearing participants account structure, such as per trading party, market or ISIN. The service will be the first step towards a POA (Power of Attorney) structure. With this structure, EMCF can send the instructions on behalf of its participants to the domestic Central securities Depositaries. This will improve settlement ratios in European markets.

"We are pleased to be cooperating with SWIFT in the initial stages of such an important project. This new service shows EMCF's dedication to removing technical obstacles to market integration and paving the way towards standardised, harmonised and efficient clearing in Europe," said Albert-Jan Huizing, Chief Information Officer for EMCF.

This decision reflects SWIFT's commitment to extend its secure messaging services based on ISO 15022 and ISO 20022 standards to other clearing-related business.

The service is in compliance with IOSCO (International Organization of Securities Commissions) recommendation number 12, efficiency, which states that, while maintaining safe and secure operations, CCPs should be cost effective in meeting the requirements of participants. Likewise it is compliant with the Giovannini Protocol Barrier 1, which was designed to standardise communication within the European clearing and settlement landscape.

Testing for clearing participants is scheduled for the last week of February.

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