The CNS Interface for prime broker is a settlement option that streamlines prime broker trade processing. The interface allows an executing broker to hand off a trade executed for a hedge fund to its prime broker for clearance and settlement.
The CNS Interface for prime broker is a settlement option that streamlines prime broker trade processing. The interface allows an executing broker to hand off a trade executed for a hedge fund to its prime broker for clearance and settlement. Clearing agencies may provide NSCC a trade offset record. This offset record nets out the executing broker's position, leaving the prime broker with the settlement obligation. The offset and netting processes simplify trade processing and mitigates risk for both parties.
Who Can Use the Service
Firms that are NSCC settling members can participate in this service.
The CNS Interface streamlines Prime Broker trade processing and mitigates risk for both the prime broker and the executing broker.
- The CNS Interface allows prime broker transactions to settle in the CNS System. CNS nets all securities transactions into one position per issue for settlement. This eliminates the need to settle prime broker transactions on a trade-for-trade basis.
- The CNS Interface reduces counterparty risk since NSCC guarantees eligible securities as a course of business.
How the Service Works
Prime Broker trade offsets are forwarded to NSCC's Universal Trade Capture system once the affirmation is complete. Once received and accepted by NSCC, the offset transactions are trade reported and then forwarded to NSCC's CNS System for netting and settlement.
- These transactions are recorded by NSCC on its UTC output.
- Participants can also find prime broker transactions in their NSCC Consolidated Trade Summary Report from NSCC under the Institutional Delivery (ID) market section.
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