AFTAs 2023: Best new technology introduced over the last 12 months (trading, risk & compliance)—Acadia

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Overview

Settlement Manager was developed by Acadia in 2023 and is designed to allow banks, traditional asset managers, and hedge funds to validate, settle, and monitor agreed margin calls, while connecting to and sharing information with multiple counterparties. The platform enables messaging for market settlements of cash or securities as well as settlements under tri-party or third-party segregation models. The service receives confirmation messages from both counterparties and provides them with transparency around near-real-time settlement status of their trades.

We have been working with Acadia to help shape a fresh approach to margin settlement. We are constantly working to improve efficiency, reduce collateral transfer times, and improve settlement transparency. Accomplishing it all within Acadia’s existing workflows is a strategic win.”

Krzysztof Wierzchowski, vice president, Franklin Templeton

Background  

Acadia created Settlement Manager in response to clients’ requests that they were about to lose their incumbent central settlement service and needed a replacement system. Acadia ensured that the replacement solution would be in place and cater to all of its over 3,000 clients. This initiative resulted in the creation of Settlement Manager, which extended Acadia’s post-trade capabilities and ensured that firms using the previous service could migrate to the new offering with minimal fuss.

Challenges addressed 

Settlement Manager addresses a historically complex, opaque, and invariably manually intensive area of the post-trade process, enabling firms to immediately execute settlements after agreeing to transfer collateral, while simultaneously improving transparency around the state of settlements, consequently reducing settlement failure. As a result of this automation, firms no longer need to instruct their custodians to settle trades on their behalf. While large parts of the industry are preparing to transition to next-day settlement (T+1) of trades, the immediate execution of settlements enables market participants to settle trades reliably on an intraday (T+0) basis.

Future plans

Acadia brought Settlement Manager to the market as a means of further automating the entire post-trade process, building on its margin messaging workflows as a means of instructing custodians and agent banks to settle trades. Settlement Manager will be enhanced to improve settlement status tracking capabilities across the Swift network, automate collateral substitutions, and improve historically siloed settlement flows.

As the industry moves toward further automation, everybody—from the big banks to boutique fund managers, in all corners of the globe—is looking to simplify the settlement process in collateral management, improve collateral mobility, and reduce settlement fails. Settlement Manager helps across the board by shortening the distance between agreeing to transfer collateral and actually making it happen.”

Will Thomey, co-head of business development, Acadia

Why they won

Acadia wins its first ever award across WatersTechnology’s various awards programs on the back of its outstanding Settlement Manager offering. Any product that increases transparency and streamlines the often-convoluted, manually intensive, and sometimes error-prone processes around margin calls and the settlement of securities transactions is worthy of an award. Settlement Manager is a case in point: It fully deserves its title of best new technology introduced over the last 12 months, because of how it addresses and transforms real-world problems faced by large numbers of market participants. Expect to hear a lot more from Acadia and Settlement Manager in the months and years ahead as it gains traction across both sides of the market and the custodian community.

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