Swift enhances trade matching for hedge funds

Delayed or mismatched trades are the bane of traders everywhere. Numerous commercially available and proprietary systems are available to alleviate these headaches with various investment managers singing their individual praises. One of the latest additions to the field is Swift's new Accord for securities.

Accord for securities is a matching solution for hedge funds' equity and fixed income trades. Developed by industry players, it builds on the Society for Worldwide Interbank Financial Telecommunications' (Swift) existing Accord trade matching system.

Launched two decades ago, Accord's capabilities include foreign exchange, money market and derivatives trade matching.

"There are two reasons why Accord for securities was needed," says Adam Wilson, Asia-Pacific head of securities markets at Swift. "These types of transactions had a high level of operational risk and were costly to match."

Live since May 18, the new solution is the result of a year-long development collaboration between Swift and a group of major prime brokers. That group includes Citi, Credit Suisse, Deutsche Bank, Goldman Sachs and Bank of America-Merrill Lynch.

According to Wilson, Credit Suisse, Goldman Sachs, and Bank of America-Merrill Lynch went live on the solution in May. The remaining prime brokers will join them in "the next few weeks" and Swift is targeting executing brokers to go live later this year.

Hedge funds are not directly connected to Accord for securities. While it is up to the prime brokers to determine how to pass along the benefits they reap from the solution, it is hoped cost savings will be realised by the individual funds and benefit the entire industry.

The need for Accord for securities is especially relevant in Asia.