Jon Ford, Head of Fixed Income Business Development

Following ICMA ERCC’s recent release of pair-off best practices, Jon Ford highlights how Pirum’s RepoConnect already answers the ERCC proposals, by making pair-offs simple, efficient, transparent and automated.

As part of the efforts by ICMA’s European Repo and Collateral Council (ERCC) to support post-trade efficiency and help reduce settlement fails, the ERCC recently released best practices on ad hoc bilateral netting (pair-offs) for consultation.

In doing so, the ERCC’s objective is to “help standardise the pair-off process, in order to make manual pair-offs more efficient and to facilitate automation, which would make an important contribution to settlement efficiency.”

We fully agree with this objective and the best practices proposed by the ERCC.

What’s worth highlighting, though, is that the repo industry already has access to a transformative method for dealing with pair-offs – a method that adheres to ICMA’s aims and to the ERCC’s best practices, enhances repo desk efficiency through automation (up to 99.8% STP), reduces settlement fails significantly, and delivers full transparency and automation.

RepoConnect

RepoConnect has been designed by Pirum to revolutionize repo transactions – from start to finish via pair-offs and everything in between – with unmatched efficiency, transparency and automation.

To illustrate, RepoConnect’s fully automated and connected ‘Pair-Off’ feature offers comprehensive:

  1. Transaction-agnostic support: accommodates both repurchase transactions and buy/sell-backs.
  2. Flexibility: enhances operational flexibility by enabling pair-offs of single ISINs or multiple ISINs simultaneously, whether for full or partial pair-offs, distilling these down to a single payment.
  3. Control: allows either party to initiate pair-offs, with configurable responses for acceptance, rejection or counterproposals, as well as clearly defined deadlines in each settlement agent’s time zone.
  4. Accuracy: offers best-in-breed data and validation capabilities to ensure accuracy, with comprehensive reconciliation processes and essential data fields in line with ERCC best practices.

Simply put, RepoConnect has already transformed the entire pair-off workflow – arguably above and beyond the standards proposed by the ERCC.