BNY Mellon, AccessFintech in T+1 FX Partnership

AccessFintech and BNY Mellon have announced a partnership to bring a joint solution to the market for addressing FX workflow challenges ahead of this month’s change to T+1 settlement in North American securities markets.

The firms say the upcoming change is posing significant challenges for market participants and that significant attention has been paid to the immediate impact of the shortened securities settlement cycle, projecting increased fails rates and pressure on the international investor community from misalignment in cross border settlements. The immediate impact of these challenges is increased capital constraints due to higher fail rates and operating costs, they add.

Funding and FX requirements are set to be a more complicated challenge, particularly for international brokers and investors operating across settlement jurisdictions and time zones, the firms observe, adding the complexity of misaligned settlement cycles means that these parties need to manage their FX requirements on trade date to settle within the T+1 window.

Security transactions left with the broker to execute during US market hours results in FX requirements only being available after hours, they further explain, meaning the local FX funding window will need to be executed on a same day basis in a less liquid market than if the FX had been executed during US trading hours the previous day and with a T+2 settlement cycle.

BNY Mellon and AccessFintech are collaborating to work with clients on addressing this challenge, providing clarity on securities trades ‘predicted to settle’ status. Clients based on AccessFintech’s network will be able to instruct BNY Mellon to broker FX transactions based on these ‘predicted to settle’ insights before the end of the US trading day, helping to provide the necessary liquidity for international clients trading of US securities.

AccessFintech says its Synergy T+1 solution ensures real time data transparency and cross-market collaboration through the entire transaction lifecycle, offering transaction data pairing to support enhanced pre-matching and reduce fail rates. It further enables data visibility on T+0 with real-time local market information included for Synergy Network participants.

“At BNY Mellon, we are laser focused on developing solutions that support our clients’ investment performance and success,” says Jason Vitale, head of global markets trading, BNY Mellon. “Our collaboration with AccessFintech will provide clients the ability to leverage our recently launched Universal FX platform to fund their T+1 settlement activity in an efficient and transparent manner.”

Roy Saadon, CEO and co-founder at AccessFintech adds, “BNY Mellon has the foresight to help clients across this challenging time in FX settlement. Together, we can achieve T+1 settlement by collaborating as a unified ecosystem.”