Clearstream has created two data-based tools to predict future settlement failures and increase settlement efficiency.
The settlement dashboard and the settlement prediction tool will offer insights into past, present and future settlements in a bid to increase the efficiency and liquidity of the market.
It comes following the implementation of the Central Securities Depositories Regime (CSDR) in February this year which will see market participants receive a financial penalty for failed and late settlements.
The settlement prediction tool will use artificial intelligence to predict future settlements, helping market participants to avoid potential settlement failures and to speed up the process.
The dashboard will also market participants analyse markets, asset classes and counterparties so they can benchmark their efficiency against their peers.
Priya Sharma, head of data and connectivity at Clearstream, said: “Most failed settlements happen due to lack of detailed knowledge of one’s own settlement activities.
“By leveraging high-quality predictive data, we provide our clients with that knowledge to be best equipped for regulatory requirements, operational excellence and settlement efficiency.”
Since the implementation of CSDR it has been less than smooth sailing for the central securities depositories (CSDs) enforcing late settlement discipline.
Last week, the European Securities and Markets Authority (ESMA) launched an industry consultation over a possible amendment to the cash penalty process.
Under the new proposals, CSDs would become responsible for collecting and distributing all types of penalties including those for settlement fails related to cleared transactions.