INSIGHT REPORT CALENDAR

Newsletter

Like this article?

Sign up to our free newsletter

Trade matching takes centre stage for alts managers in Q2

Related Topics

Trade matching continued to be a key focus for alternatives managers in the second quarter of the year, amid a normalisation of transaction volumes after the banking sector volatility seen in the first quarter, according to the latest data from Citco.

The company’s Q2 2023 Middle Office Solutions Report, shows that demand for trade matching services climbed sharply in Q2, with both cash trades and swaps climbing 31% and 33% respectively.

The impact of Central Securities Depositories Regulation (CSDR) rules in Europe continue to have an impact on demand for outsourced trade matching services. Overall, Citco saw a 15% increase in the number of affirmed trades used for trade matching in Q2, following a 14% increase in Q1.

The second quarter also saw the value of treasury transactions fall as managers switched to more of a “business as usual” stance with regards to treasury management. After making significant changes in the first three months of the year in response to volatility in the banking sector, Citco saw a drop in the value of treasury transactions by 20% versus the first quarter, to $348bn. This was despite the volume of transactions ticking 2% higher than Q1.

Citco’s Q2 2023 Middle Office Solutions Report also found cash itself continues to be highly prized among alternatives managers. Cash margin movements, which track how much cash is posted as collateral for trades, dropped 9% in Q2 as managers opted to utilise cash as an investment rather than post it as collateral.

Instead, the volume of securities-based margin movements continued to climb, rising 6%, as alternatives managers posted securities instead of cash as collateral.
 

Like this article? Sign up to our free newsletter

FEATURED

MOST RECENT

FURTHER READING