Trade Matching

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Status: Under Review, Last Updated: 09/11/2020

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The process of trade matching is intended to ensure that transactions, once input into the security settlement system (SSS) at a CSD or ICSD, do not fail to settle because of instruction mismatches.

It is not recommended that counterparties rely purely on trade matching at the SSS for verification of the terms of transactions, as this usually reduces the available time to correct mistakes or resolve disagreement. This in turn may lead to an unexpected build-up of risk.

Once a transaction negotiation concludes, counterparties should promptly verify the terms of the transaction, through trade confirmation and response, prior to input to respective security settlement systems. This procedure will mitigate the risk of trade mismatches and avoid trades being set up with economic differences.

It is recommended that a market vendor is utilised for such trade matching, and that the counterparties to the trade send files to the vendor for comparison at least every 15 minutes, thus allowing pre-matching to occur as soon as possible. The data sent to the vendor should contain all relevant fields for comparison, including the SSIs such that they can also be compared prior to the CSD/ICSD. See IBP-153 for more information on contract compare. (IBP-118)