the gap to STP
CSFB Transaction Services Solutions & virt-x
services industry is constantly changing. CSFB is dedicated to serving
financial institutions and empowering their businesses through world-class
banking products and services. Our role is to look ahead, develop new
services and advance existing ones in order to enable our clients to
leverage these changes.
the revolutionary electronic exchange and trading platform.
June 25, 2001 was an important day for CSFB and for the Swiss capital
market in general; it marked the launch of the Swiss-UK joint securities
market "virt-x". With its introduction, participants were able
to shift their trading focus from a domestic to a pan-European view. Using
this single common platform it is now possible to trade some 650
pan-European blue chips from 17 markets that are quoted in six different
Virt-x took a best
of breed approach to building its infrastructure. Tradepoint, based in
London and regulated by the FSA, provides the legal structure, with SWX
providing the underlying technology. The result is a single trading
platform that allows the entire trading-settlement value chain to be fully
leveraged, resulting in highly efficient processes at low cost.
processing for lower cost and higher efficiency in the settlement of virt-x
One-way processing is a primary advantage of the business flow for the
settlement of virt-x traded transactions. The chart in figure 1 (below)
shows how locked-in "master" trade data flows within seconds
from virt-x to SECOM and on to CSFB for immediate notation as a
pre-booking in the customer account. CSFB holds sub-accounts for customers
at SIS, which they use to check balances and effect settlement. Upon
settlement, SIS sends the definitive settlement confirmation to CSFB. CSFB
, in turn, sends an MT 53x confirmation back to the customer.
means less processing complexity. Settlement efficiency rates for
traditional SWIFT custody processing range from 80% to 90%. Settlement
efficiency rates for virt-x on-exchange transactions exceed 99.8%,
offering a decisive advantage in minimising transaction costs. Moreover,
the virt-x model reduces transaction complexity. Because clients receive
trade confirmations directly from virt-x, these can be used to pre-note
transactions until the MT 53x is received from CSFB , making the costly
and complex step of MT52x matching redundant and obsolete. In practice,
this means it is no longer a requirement for clients to send
"slave" SWIFT data confirmations to CSFB to complete the
However, as a
special option we offer clients the possibility to send us MT52x
instructions for virt-x transactions that will be matched against the virt-x
master data. In all cases of unmatched trades from the customer, the
master data prevails. In the case of a matched trade-ID and different
content, the master data prevails. Late or duplicate client confirmations
will be rejected and communicated to the client.
Figure 2, above,
shows how the flows of virt-x transactions compare to those coming from
CSFB is a major market maker and user of the system. We were one of the
founding members and early adopters of virt-x. We believe that there is
enormous potential for increasing efficiency and reducing costs across the
whole order-execution-settlement cycle. This belief drove our decision to
offer a fully automated settlement service to virt-x members from day one.
Initial experience has supported our belief in this service. Both we and
our clients have been able to enjoy a problem-free settlement environment.
With its status as a General Clearing Member (GCM) of London Clearing
House (LCH), x-clear will offer its members - such as CSFB - an interface
to LCH and access to the service. CSFB has already started projects to
prepare for the upcoming changes and to offer clearing and settlement
services to its clients.
CSFB was a founding member of GSTPA, an industry initiative designed to
facilitate the cross-border settlement of securities transactions. GSTPA
captures the post-trade / pre-settlement information flow between the
investment manager, the broker/dealer, and the global custodians. This
offers the potential for a massive decrease in turnaround times, as well
as improved STP rates. GSTPA is an essential pre-requisite for the
industry to move to T+1 settlement. Credit Suisse Group has committed
itself as a pilot in all three areas: investment management (Credit Suisse
Asset Management), brokerage (SASI-Swiss American Securities) and custody
TSS - Payments
CSFB is one of the leading domestic clearing banks in Switzerland. Credit
Suisse was a founder member of SIC (Swiss Interbank Clearing), the first
RTGS payments system in the world, as well as of EuroSIC, the Swiss Euro
clearing system. Our expertise stretches beyond Swiss francs. Supporting
our private banking businesses and other Credit Suisse Group companies
requires us to operate an extensive nostro network in over 50 currencies.
We already offer correspondent banking services in over 30 currencies.
This is the multi-currency experience and processing capability that has
served as the foundation on which we have developed our CLSTM
TSS - CLSTM-Continuous
In response to the 1996 call from the Bank for International Settlements (BIS)
to reduce cross-border settlement risk, a group of leading institutions
came together and produced the concept for CLSTM. It has taken several
years to come to fruition, but CLSTM is now an impending reality. There
should be no doubt that CLSTM will have a significant impact on the
operations of all the FX market participants that use it. CLSTM offers the
chance to eliminate settlement risk via a payment-versus-payment mechanism
and in doing so to meet the goal set out by the world's regulators.
CSFB is committed to being a leading provider of CLSTM-related services.
We will be a liquidity provider in Swiss francs to other Settlement
Members and to CLSTM Bank. In addition, we have developed a series of
products to support access to CLSTM for non-members, known as Third
Third Party services will range from a standard suite of CLSTM accounts
for the initial seven currencies, to the provision of full nostro and
payment services in CLSTM and all other currencies, to a completely
serviced FX back-office where we act as a settlement agent, providing
matching and settlement for clients. CSFB has developed its tools to
ensure that clients have full control over their transactions at all
times. Our approach to technology means that clients can minimise the
costs of changing their own systems. Execution is an integral part of our
offering. CSFB is unique in offering a CLSTM service that provides
seamless integration with an on-line FX execution tool, PrimeTradeFXSM.
size does not fit all.
There is no single CLSTM solution that meets everybody's needs.
Understanding needs and selecting solutions requires dialogue. CSFB is
committed to a partnership with its clients that ensures a successful
Trust, the core of any lasting relationship, is based on experience,
know-how and understanding. We cannot trust what we do not know and what
we do not believe in. At CSFB Transaction Services & Solutions, we
strive to provide our clients with excellence in technology and service,
providing the information that enables them to make well-informed
decisions and plan for the future.
Each client is assigned a relationship manager who will work with him to
understand the specific business and working environment and ensure that
the right set of tools are in place to best meet that client's needs.
Relationship managers are bankers themselves with a comprehensive
knowledge of our services as well as of the industry and are available to
help clients find the best fit and mix of tools and services.
Relationship Managers work together with clients to help tailor a specific
offering to fit their needs. Feedback helps us to understand better how to
focus on the right client issues and most appropriately improve our
TSS - Banking@CSFB
Finally, CSFB is developing a single unified online platform that will
allow you to access all TSS products and services through a standard
browser. Specialised tools give you maximum control over your account
processing in each of the TSS areas: Custody, Payments and CLSTM. For
example, through Banking@CSFB, clients can access Settlement Scorecards
such as shown in figure 3 for both Custody and CLSTM. CSFB 's CLSTMHub can
immediately identify exception trades and offers an alerts service, giving
clients the option to receive alerts via email, mobile telephone or PDA.
The alerts service can also be used to communicate specific
client-determined information requirements such as exceeded credit or
balance limits. Exceptions can be easily found online in the summary
reports and drill-down functions give clients the transparency to view
directly the most detailed level of transaction data. SWIFT messages can
be accessed at all levels. CLSTM Third Party clients benefit from maximum
control through constant real-time information on all CLSTM-related
trades. With an enhanced service, they will be able to monitor and manage
account balances for all FX transactions.
and General Information.
The Access Management area is where administrators can centrally manage
application access rights for their users. This area also covers general
administrative issues such as "change password" or
"administrate subscriptions" and gives the administrator access
to client contracts and agreement data. The General Information area
includes tabs where you can access newsletters, a list of cut-off times,
the CSFB SWIFT Formatting Guidelines, Interbank Interest Rates and a
listing of official Swiss and international Bank Holidays.
Banking@CSFB uses the highest international security standards. We employ
a three-tier architecture, physically and logically segregating entry,
authentication and application servers.
by the TSS Editorial Team
For more information on how you can benefit from the TSS offering, contact
your TSS representative.
Jurt in Zurich
tel: +41 1 333 32 13 or
Nutt in London
tel: +44 20 7888 8119
Markus Bhend in Zurich
tel: +41-1-333 69 09