Modernize Cleared Trade Processing Platform

Alevinsoft looks to modernize decades of processes and infrastructure across global cleared markets

Our solution treats the Clearing House as the ‘golden record’, rather than have parties replicating their own operational ledgers

Using consensus & immutability mechanisms of distributed ledger technology (DLT), we aim to provide a simplified clearing workflow, upgrade legacy architecture and provide much needed cost reduction to market participants

How Clearing works today

  • Individual siloed ledgers where each individual party books and manages their own version of the truth
  • Trade events require a chain like workflow process from the clearing house to clearing member to end client or vice versa
  • Heavy reliance on clearing members to reconcile and push down transaction and margin information to end clients
  • End clients reconcile indirectly via clearing members
  • Lack of transparency amongst the parties as to where operational risks and outages occur
  • Increasing complexity for clearing members and end clients exists, as they trade across numerous clearing houses
  • Individual clearing house or regulatory updates need to be managed independently by each party

DLT Enabled Clearing

  • Individual participants own private permissioned node/ledger on a common DLT network
  • Initial transaction is posted to each parties node by the clearing house, as they are the keeper of the golden record
  • DLT consensus and immutability logic will maintain accuracy of ledgers reducing the need for reconciliation
  • Trade events will now have initiator and/or validators in updating the ledger e.g. only the clearing house can populate a new trade onto the node/ledger or clients can initiate a portfolio transfer with clearing house/members validating
  • System designed to show transparency on who owns the next step in the process flow
  • Clearing house changes can be pushed out to all nodes, reducing the amount of development on other parties

DLT Network

The DLT Hub

  • A true representation of the Clearing Houses(CCP) trades/position/margin
  • Provide matching engine versus internal risk trading system
  • Ability for each party to append proprietary data elements
  • Data file integration with other downstream functions i.e. data warehouse, reg reporting or financial sub-ledgers, etc…

The Application

  • Exception trade queues
  • Trade event management
  • Margin management
  • Static data mapping tables
  • Customized report engine generator
  • MIS report generator

The Technology

  • Private node held on AWS Cloud
  • DLT platform built on Corda
  • Flexible on pram or cloud hosting (on member cloud instance)
  • Single interface across all asset classes
  • Simplified process to add new CCP changes or products
  • No batch process requirements

The DLTHub

Alevinsoft’s DLT Hub is aimed at all direct participants in the cleared markets. Whilst the commonality is the transaction record on the ledger there are functionality differences, which our solution will cater for .

Clearing House

  • Initiator of golden record
  • Processor of all trade events but may not be initiator
  • Releases all new/updated products

Clearing Member

  • The intermediary between clearing house and end clients
  • Mostly validates changes initiated by end client
  • Controls access of end clients to markets/products
  • Sets clearing terms for end clients i.e. margin multiplier & fees

End Client

  • Usually initiates trade events from allocations, compressions, transfers
  • Approves clearing broker terms

The foundation of any post trade function always requires a reliable and dependable ledger. Today most third party services require a replication of the clients trade database. Alevinsoft see efficiency and further cost savings for our clients by working with other third party providers to offer solutions from payments/collateral, fund admin, trade repositories, etc…