CNS Prime Broker Interface

Streamlined Prime Brokerage Settlement

Prime broker trade processing can be complex, involving multiple parties, manual steps and increased risk of settlement fails. Without a centralized process, firms often rely on bilateral settlement, which is more resource-intensive and lacks the benefits of centralized netting and settlement.

The CNS Prime Broker Interface provides a streamlined settlement solution that enables executing brokers to hand off hedge fund trades and asset transfers to prime brokers for centralized clearance and settlement. Supporting both trade and asset transfer workflows, the service helps reduce manual intervention, improve settlement efficiency and lower operational risk.

Additionally, the interface supports the transfer of hedge fund asset positions between prime broker accounts through an automated, standardized matching process. This helps reduce the likelihood of fails and reclaims, resulting in greater straight-through processing and more efficient operations.

Key Features & Benefits

Drive Operational Efficiency

Automate trade and transfer workflows, reduce manual touchpoints and improve processing consistency across prime brokerage operations.

Simplify Settlement

Net eligible transactions into a single position per security, eliminating trade-for-trade settlement and reducing operational complexity

Reduce Counterparty Risk

Leverage NSCC’s guaranty of eligible transactions to reduce exposure and strengthen confidence in the settlement process.

Support Multiple Workflows

Process both prime broker trades and hedge fund asset transfers through a standardized, automated framework.

Using This Service

NSCC Full-Service Members

The CNS Prime Broker Interface is available to NSCC full-service Members that utilize CNS®, including executing brokers and prime brokers participating in eligible transactions and asset transfers.

CNS Prime Broker Interface supports both trade and asset transfer workflows. Qualified clearing agencies can submit trade offset records that net out the executing broker's position and assign the remaining settlement obligation to the prime broker.

The service also supports the transfer of hedge fund asset positions between prime broker accounts through an automated and standardized matching process designed to reduce settlement exceptions and support efficient processing.

Agent ID and Executing Broker ID Guidance

Brokers may use the same Agent ID or Executing Broker ID for matching both prime broker trades and transfers, or they may request separate IDs for each process.
The prime broker submitting the confirmation must use an Executing Broker ID that is eligible to settle in CNS®.

To open a new Agent ID or Executing Broker ID, brokers must submit a request.

CNS® Eligibility Exceptions

If a security is eligible for CNS® at the time of affirmation, ITP forwards the affirmed transaction to UTC. If the security subsequently becomes ineligible before UTC sends the transaction to CNS®, UTC may include the transaction in NSCC's guaranteed balance order process.

Through this process, a clearing Member may be assigned balance orders with another NSCC Clearing Member. These balance orders settle at a uniform settlement price and remain guaranteed by NSCC until settlement date.

Alternative Settlement Method

An alternative settlement method for prime broker asset transfers allows counterparties to settle directly and bilaterally at DTC. Additional information is available in the Bilateral Settlement Processing section.

CNS Prime Broker Interface leverages DTCC's existing trade processing, netting and settlement infrastructure, including:

TradeSuite ID® for the matching and comparison of prime broker transactions.
Universal Trade Capture (UTC) for trade capture of street-side transactions, including ITP prime broker trades.
CNS® for centralized netting and settlement processing.
Inventory Management System (IMS) for electronic book-entry movement of settlement positions.

NSCC Full-Service Members

The CNS Prime Broker Interface is available to NSCC full-service Members that utilize CNS®, including executing brokers and prime brokers participating in eligible transactions and asset transfers.

CNS Prime Broker Interface

Streamlined Prime Brokerage Settlement

Key Features & Benefits

Drive Operational Efficiency

Simplify Settlement

Reduce Counterparty Risk

Support Multiple Workflows

Using This Service

NSCC Full-Service Members

Agent ID and Executing Broker ID Guidance

CNS® Eligibility Exceptions

Alternative Settlement Method

NSCC Full-Service Members

Resources

CNS®

Trade Affirmation: TradeSuite ID®

Universal Trade Capture

Reference Documentation