Provable Markets today announced the successful, real-time novation of a pre-existing bilateral transaction into DTCC’s National Securities Clearing Corporation’s (NSCC) Securities Financing Transaction (SFT) Clearing Service, leveraging Provable Markets’ Alternative Trading System (“ATS”), Aurora. NSCC’s SFT Clearing service provides central clearing and settlement for overnight borrows and loans of equity securities.
In this first use case for novation, an outstanding bilateral transaction was routed to Provable’s ATS for confirmation and then forwarded to NSCC’s SFT Clearing service for processing. In doing so, NSCC became the lender to the borrower and the borrower from the lender. The joint offering enabled novation to be completed in real-time, with minimal operations intervention, and without the need to recall and return the outstanding trade. In addition, Provable’s ATS provided further downstream processing in near-real time to the respective clients’ books and records systems through its role as an NSCC Approved SFT Submitter.
In conjunction with Provable’s broader offering, this workflow now manages both cleared and uncleared activity in one place, providing maneuverability on demand across settlement types as market dynamics fluctuate.
Matt Cohen, CEO of Provable Markets commented, “It’s hard to underscore the importance of completing this novation, only made possible through detailed and thoughtful collaboration between Provable Markets, DTCC, and our clients. Novation often carries the stigma of being extremely difficult to complete between all parties to a transaction. In contrast, capitalizing on the benefits of clearing in near-real time can be a game-changer, opening up tangible possibilities for participants of all sizes to realize immediate ROI at a time when capital relief optimization and operational excellence are of utmost importance to operate efficiently in today’s market landscape.”
John Vinci, Managing Director and Head of Securities Finance and Collateral Management at DTCC, added, “DTCC is pleased to successfully complete the first novation of an existing bilateral stock loan into NSCC’s SFT Clearing service with assistance from Provable Markets and its Aurora platform. The SFT Clearing service aims to provide NSCC members with the ability to offset their balance sheets through novation to NSCC, including existing NSCC members as well as their institutional clients. We look forward to continuing our work with Provable Markets to deliver our clearing capabilities via our SFT offering to an even larger community of members.”
About Provable Markets
Provable Markets is a member of FINRA and SIPC, operator of cloud-native Alternative Trading System Aurora, and is regulated by the US Securities and Exchange Commission.
Aurora offers front-to-back trade, lifecycle, books and records, and post-trade solutions delivering execution optimization, operational efficiencies, and risk reduction across the value chain.
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