Baton Systems Signs FX Global Code SoC
Posted by Colin Lambert. Last updated: July 26, 2021
Just a week after the Global Foreign Exchange Committee updated the FX Global Code, including changes to recommended best practice for FX settlements, technology provider Baton Systems, which seeks to modernise payments and settlements in the FX market, has signed a Statement of Commitment to the Code.
The firm says the signing underscores its commitment and support to firms keen to eliminate settlement risk by enabling real time, payment-versus-payment (PvP) settlement for all market participants.
In the revamp of the Code following the three-year review, several changes were made to recommended settlement practices, most significantly Principle 35 strengthened previous guidance, advising “Market Participants should reduce their Settlement Risk as much as practicable, including by settling FX transactions through services that provide PVP settlement where available.”
Baton provides on demand PvP settlement for assets, in accounts held at commercial banks and says since launch it has facilitated the PvP settlement of trillions of dollars. It uses distributed ledger technology (DLT), deployed through the cloud using a single tenant architecture, without the need for tokenisation.
Backed by a rulebook, Baton says it currently facilitates PvP settlement in 18 currencies across a spectrum of G10 and EM currencies. In addition, it provides participants with the ability to settle when it best suits their funding profile, with access to real time netting and payment strategies.
“The world of clearing and settlement is on the threshold of revolutionary change,” says Arjun Jayaram, CEO and founder of Baton Systems. “We see the updated FX Global Code as validation that today’s status quo for settlement risk and liquidity management must evolve. There is a clear need for safer and more robust settlement protocols for all currencies and all market participants.”