The heads of Pirum’s Product team share their thoughts on what will truly move the dial this year for stock borrow and loan (SBL), repo, collateral and derivatives post trade services. This post will be updated every few days with new insights. 

Tom Veneziano, Product Director, Head of North America Product 

For North America, top of mind will be the shifting regulatory landscape. On May 28th, market participants operating in the US, Canada and Mexico will move from T+2 to T+1 settlement. Thankfully, Pirum’s Recalls Manager is T+1 ready. For our clients, the shortened settlement cycle may not represent what we in the states like to call a nothingburger, but it definitely is a non-problem: our solution was designed from the outset to operate in real time. 

Meanwhile, the SEC’s 10c-1a regulation – effective date 2nd January 2026 – aims to increase transparency for securities lending reporting in the US. Again, Pirum’s US clients can rest with ease: our RegConnect solution, built in partnership with S&P Global, was designed to accommodate the similar, though more complex and stringent, European SFTR requirements. 

As our tech build already covers the regulatory horizon and beyond, we are able to focus on getting Pirum’s US Post Trade Services solution to market. The fact our platform achieves an industry-leading 99.8% straight-through processing (STP) rate, and will soon cover the entire post-trade lifecycle, with a significant and proven return-on-investment; all this makes 2024 a potentially vintage year for us, and the industry. Pirum has a compelling story, and we are pumped to get out there and tell it. 

John Tootell, Head of Transition

Last year, Pirum saw a significant increase in usage of our Front Office Service solutions, including Trade Risk Manager (TRM), and a doubling in the number of clients using our Corporate Actions solution, CoacsConnect. One of our strengths is the breadth of available counterparts on our platform – meaning that the more clients and their counterparties (even ones that aren’t Pirum clients) use the platform, the more they all benefit! Which is why, in 2024, I’m looking forward to extending these benefits, as we continue rolling out RepoConnect and Recalls Manager, engaging with the industry via our innovative  Design Partner Groups.

Another area that I'm excited about is the prospect of more collaboration with other vendors in 2024. As an example, the FIS Securities Lending Processing Platform (formerly Loanet) connectivity allows FIS clients to receive and issue recalls to Pirum counterparties. This will be a game changer for the US domestic market.

Additionally, we are working with several other vendors to build new Pirum standard integration points, which will allow clients to onboard with us even more easily in the future.

From a personal perspective, the industry has a great opportunity right now to help re-shape and update the ISLA Best Practices. I'm proud to be in the working group, expertly led by ISLA’s Tony Holland, that is reviewing the Best Practices. We have made a great start on this project, and I look forward to contributing, alongside the other ISLA member firms, towards the 2024 updates.

Lastly but most certainly not least, SSIConnect will be transformative for the industry this year – watch this space…

Ed Sharpe, Head of Post Trade Services

With the North American market moving to a T+1 settlement cycle in April, the UK and European markets expected to follow, as well as CSDR penalties already in full swing, industry participants need to ensure timely trade matching, collateral processing, and settlement this year, more than ever.
   
The adoption of Pirum’s tri-party required value (RQV) and Trade Risk Manager (TRM) services continues to grow rapidly, as industry participants seek to mitigate the risk of reduced settlement cycles, and increasing fails costs and penalties, and funding costs.

2024 also brings renewed client interest in Central Counterparties (CCPs). Pirum is well versed in CCP connectivity; we are actively participating in industry workshops and working closely with clients.

Jon Ford, Head of Fixed Income Business Development 

2024 will see acceleration in standardisation and automation in the repo post-trade lifecycle. Whilst automated electronic trading has exploded in the last few years, many problems persist in post trade, exemplified by stubbornly high fails rates and all the additional costs associated therein.  

Automation cannot come soon enough, as regulators drive their end-game focus on improving firm and market-wide resiliency in the face of continued market stress.  Market wobbles – from the Sovereign Debt crisis in 2010, the Taper Tantrum of 2013, to the repo year end volatility in 2016/17, to the Money Market blowout in 2019, through Covid in 2020 and the UK’s mini-budget disaster of 2022 – have all exposed the soft underbelly of the fixed income markets despite reforms implemented thus far.  

As a result, regulators continue to push through Prudential Regulation, such as Basel III and IV, to improve firm-specific capital and liquidity buffers (post GFC), as well as market structure reforms, such as centralised clearing, UMR and accelerated settlement, in order to improve wider market resiliency.  

The regs currently on the table or being implemented (including T+1, Mandatory Clearing, Mandatory UMR Margining, Mandatory Haircuts, Mandatory Buy-ins, Increased CSDR settlement fines, potentially new UK Settlement Fines, sec fin reporting in the US) are largely focused on ensuring that post-trade processes support efficient markets and evolve to reduce market disruptions.  

Pirum offers a suite of products that enables clients to better meet such challenges by making their BAU Repo activity more manageable, more accurate and more controlled. Starting with RepoConnect, Pirum brings automation and efficiency to the repo post trade lifecycle, helping clients to automate across the full transaction, margin and collateral management processes.  This enables our clients to reduce cost and risk, as well as to improve scalability, efficiency and profitability. When fully utilised, the Pirum product suite delivers on average 99.8% STP rates, with outstanding return on investment (ROI) for clients. 

Payal Lakhani, Senior Product Manager

2024 brings the introduction of Voluntary Corporate Actions (VCA) into the CoacsConnect platform. This move is not just about keeping up with technological advancements; it's about setting a new industry standard for how corporate actions are managed and processed.  

All of us in this space know of stories about a loss or near miss, as well as costly mistakes, yet too many still rely on error-prone manual processes, which can often go unnoticed until it's too late. Whilst we watch on, tech in other areas of the market has been advancing rapidly, propelled by the likes of AI, but corporate actions have remained, until now, relatively untouched. So, it's time to let go of those archaic processes – including faxes! –  and step into the world of digital transformation.  

Pirum’s VCA service will increase automation and visibility across corporate actions, reducing risk and enhancing operational efficiency significantly, which is why this year VCA will be a game-changer for the industry.

Robert Keane, Recalls Product Manager

When we began building Recalls Manager, the global market was content with T+2 settlements. We still took the view that, in this day – when the most complicated of processes could be automated by combining digital tools and exception management – we would aim for as real-time as possible.

That ambition paid off because things changed and, as they often do, fast.  When the SEC put T+1 on the agenda for the first time, Recalls Manager was already in flight to be ready within their time frames.

It’s been truly rewarding seeing several firms going live recently with Recalls Manager. In 2024, we will be working hard to onboard new clients, so they can also reap the solution’s fruits of reduced fails, CSDR penalties and overdraft costs, mitigated buy-in risks, increased control and oversight, to name a few. This promises to be a particularly busy year, as the industry today understands the benefits of adopting a tried and tested specialist, like Pirum, versus the heavy lifting and CapEx of building/rewiring their own solutions.

Finally, Pirum’s existing suite of tools which will continue to smooth out our clients’ settlement-related issues. This again ties in with T+1, but more importantly reflects Pirum’s continuing mission to automate the full post-trade lifecycle for our clients.

Get in touch with us if you  would like to know how we can help your business.