Publisher: Butterworth-Heinemann, 2002, 235 pages
Clearing, settlement and custody is at the heart of everything that happens in the financial markets. The evolution of clearing and settlement is one of that is still happening and as such, it is impacting on the operations function through both new practices but also, increasingly, in terms of regulation, risk and reputation.
In essence, the efficient clearing and settlement operation is managing risk, not because it is a direct part of the process but rather because it is a bi-product. The routine procedure relate to reconcilliation and record keeping. If these are performed efficiently and accurately, it will result in accurate records of activity and profit/loss.
The settlement process is a key element in identifying and correcting erros made by dealers and traders. Failure to identify the error or act promptly will result in potentially serious financial loss, as well as worrying the auditors and regulators.
In addition to these concerns the financial service sector is also undergoing a massive rationalization of the structure of clearing and settlement and seeking the twin goals of automation and shortening settlement cycles. The challenge for operations managers is considerable: manage costs, eradicate inefficiencies, create an environment to be competitive, and implement the procedures to meet future changes that will occur.
In this book the author looks at some of the different roles, the processes and procedures, and the key issues, in order to help those in operations meet the challenge.
Clearing, Settlement and Custody covers:
An excellent introduction to the investment banks, Back-Office. Recommended reading.