Publications

The Full FX

The Full FX Unfiltered – With Baton Systems

Baton Systems’ CEO Arjun Jayaram talks to Colin Lambert about how the FX settlement space is changing and why distributed ledger technology is playing a bigger and bigger role in the transformation. The two also talk about how this evolution benefits the trading desk and is playing out well beyond the institutional settlement space.


IFR

'Perfect storm' of regulation and volatility puts margin calls centre stage

This article highlights the challenges faced by derivatives users due to stricter regulations and a surge in margin calls across the finance industry. The increased focus on collateral management arises from the need to reduce counterparty risk and ensure the smooth functioning of the financial system. The article specifically mentions Baton Systems and its president, Jerome Kemp, as a company experiencing increased demand for its collateral services, primarily driven by clients of futures commission merchants who have felt the strain of increased margin calls.


Global Investor

Firms facing tough choices as UMR window closes – experts

Check out the latest article discussing the challenges faced by firms as the UMR window closes and margin requirements rise. Jerome Kemp, president of Baton Systems, emphasised the complexities of optimising collateralisation processes for both cleared and uncleared portfolios in the current market volatility.


The Full FX

FX Market Approaching Last UMR Test: Is Change Upon Us?

As the FX market approaches the last UMR test, significant changes are on the horizon for firms. In a recent article by Colin Lambert, our very own Jerome Kemp, President of Baton Systems, shared his invaluable insights on the evolving landscape and the role of technology in optimising the margining process.


The Trade

T+1 risks a surge in fails for FX-dependent trades, says GFMA

Baton Systems featured in The TRADE News on the impact of T+1 settlement timeframe on cross-border securities settlements! Our very own Alex Knight, Head of Global Sales and EMEA, shares valuable insights on the importance of factoring in FX settlement time for seamless trading in US securities from outside the US.


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Little support for European Commission’s clearing plans, Acuiti report says

Jerome Kemp, President at Baton Systems shared his thoughts on the Acuiti report on EU clearing rules. The report reveals that 92% of senior derivatives clearing executives do not support the European Commission’s proposed changes, which would require firms clearing certain Euro-denominated products to clear a portion in the EU and maintain an “active account” at an EU-based clearing house.


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No Margin for Error in Choppy Waters

Alex Knight, Head of Global Sales and EMEA at Baton Systems, discusses recent developments in margin and the importance of optimizing the collateral management process. He highlights that volatility has caused dramatic moves in both initial and variation margin, resulting in large excess or deficit for clients of clearing members. It is beneficial for clearing members to offer non-cash assets as collateral to Central Counterparties (CCPs) wherever possible, as cash is more productive when used for other purposes. Real-time information is essential in the collateral management process, as it allows clearing members to execute the automatic delivery or recall of assets and ensure a beneficial collateral composition. Visibility, connectivity, and flexibility should be top priorities in optimizing the collateral management process for clearing members and their clients.

 


Risk Net logo

Token effort is no blockchain boon for illiquid assets

Arjun Jayaram, CEO of Baton Systems, provided insights on tokenising illiquid assets. According to Arjun, tokenisation may not necessarily bring new liquidity or access to new buyers and sellers for retail investors. However, he does see potential for tokens in facilitating asset mobility, particularly for bonds outside G7 currencies that are less liquid and more risky to exchange. Arjun suggests that tokenisation could enable more assets to be settled, thus releasing liquidity, in a riskless exchange such as token-versus-token or token-versus-cash. The article also explores the views of other experts and discusses the different ways in which tokenisation is being used by various banks.


finance-feeds

Baton Systems’ Alex Knight on solving post-trade with DLT at FIA Boca 2023

Alex Knight, Head of EMEA at Baton Systems, was interviewed by Nikolai Isayev from FinanceFeeds at the FIA Boca 2023 conference. In the interview, Knight discussed Baton Systems’ use of DLT technology to solve post-trade inefficiencies, emphasizing the importance of real-time settlement and addressing liquidity issues for emerging market currencies. He also touched on regulatory challenges and highlighted the need for collaboration between industry players and regulators.

 


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BIS: facilitating increased adoption of PvP

The BIS has released a report under the G20 cross-border payments program, advocating for increased adoption of PvP to reduce foreign exchange settlement risk and improve cross-border payments. While existing PvP arrangements have reduced settlement risk, some market segments remain exposed to risk due to a lack of availability of PvP arrangements for all currencies. Baton Systems, a provider of post-trade solutions, emphasized the need for efficient reconciliation, netting, and safe settlement of FX transactions for a greater number of currencies and participants on a bilateral PvP basis. Baton’s DLT solution has helped clients settle PvP using existing payment rails and bank account money, overcoming legal and regulatory barriers to adopting some PvP solutions.