Contract for Difference (CFD)

Dealing in CFD’s can be a complex business. However, it doesn’t have to be that way. Inefficient post-trade processes are responsible for generating a significant level of trade breaks, introducing market and operational risk. In particular:

• Manual processing of trades inevitably increases costs and errors as data needs to be re-entered at every stage with no way to automatically verify its validity
• Varied and inconsistent communication, by fax, email, telephone and files, creates a wall of “noise” through which it is hard to see exactly what the trade requirements are
• Lack of visibility across the trading process means counterparties often have to work “blind” with no clear picture of their exposure or risk
• Delays in trade confirmation mean that it can be up to a week before trades are settled, tying up valuable resources and increasing commercial uncertainty.

Traiana Harmony for CFD’s is a web-based solution that reduces the cost and complexity of the CFD’s  market by providing automated, post-trade execution services for Buy-side and Sell-side firms. It is the only solution that provides the complete range of post-trade services, including straight through processing, allocations, confirmations, give-up notification,, reporting and analytics.

Key Benefits

Harmony for CFDs is already the de facto standard for high volume CFD trading in the UK, being used by all 55 Executing Brokers, giving up to all of the 12 major swap counterparties (Prime Brokers). So new users connecting to the service can hit the ground running and realize immediate and tangible benefits by joining a well established community.

Harmony’s model is focused on optimizing the economics of the swap market for every participant. Its best practice procedures and full audit capabilities also make it much easier to maintain transparency, security and evidence of compliance in today’s increasingly regulated environment.

Clients

• Enhanced management control with complete end-to-end visibility of each trade across all Prime Brokers, so Buy-side no longer have to work “blind” and can control their overall risk exposure
• Better use of resources as the firm’s real-time trading position is much clearer, increasing the window to trade more with the available financial resources
• Improved STP process provides the ability to STP give-up counterparty allocation to eliminate trade proposals being directed to the incorrect swap party.

Executing Brokers

• Greater efficiency with a consistent method of communication:
  • valuable staff resources are freed-up from manually re-entering trades, significantly reducing the risk and cost of errors in data entry
  • eliminates the complexity of handling a wide variety of information sources, such as faxes, emails and spreadsheets
• Increased revenue as firms can trade faster, more cost-effectively and with less risk, which also increases customer confidence and willingness to trade more.

Prime Brokers/Swap Counterparties

• Improved customer service by offering a faster service with fewer errors, including:
  • real-time trade, status and reconciliation
  • automatic detection of errors and mismatched trades, by centrally matching client vs Executing Broker, so any issues can be fixed immediately
  • additional services include: facility to confirm other trade information, such as terms, rates, repayment values and maturity dates, in order to ensure full matching of your swap support portfolio.