Implementing STP in the Nigerian Fixed Income Market

primary aim of the project is to help Nigerian financial institutions achieve straight through processing throughout the entire trade cycle of fixed income securities

The Financial Markets Dealers Association of Nigeria has been appointed PM Global Consulting as the lead Project Manager and Technical Consultants for a ground-breaking project to implement Straight Through Processing (STP) in the Nigerian fixed income market.

The primary aim of the project is to help Nigerian financial institutions achieve straight through processing throughout the entire trade cycle of fixed income securities. Such fixed income securities include but are not limited to FGN, State and Corporate bonds, Treasury Bills, Commercial Paper and Bankers Acceptances.

Straight Through Processing (STP) is a securities industry-wide term to describe the objective of managing trades throughout the trade lifecycle automatically and without human intervention.

The parts of the trade lifecycle that can be automated and handled on an STP basis include:

  • Order Management: via automated links to STOs or to order driven exchanges.
  • Trade Execution: via ECN providers like Reuters or the Money Market Terminal, or IDB service providers like ICAP.
  • Trade Capture (Front Office): from ECN or ICAP ETC service into a trading system.
  • Trade Capture (Back Office): from a trading system.
  • Trade Enrichment: from static data.
  • Trade Validation: through automated comparison of trade detail with validation rules.
  • Issuing Trade Confirmations: via a secure electronic connection.
  • Reporting the trade to the regulatory authorities: via a secure electronic connection.
  • Issuing Settlement Instructions: through secure electronic links to the CSCS.
  • Matching of Settlement Instructions: through automated comparison mechanisms.
  • Settlement of the trade by the custodian: via the automated book entry method.
  • Updating of Internal Records following settlement: as a result of CSCS communicating details of settled trades automatically.
  • Reconciliation between internal records and externally held information: as a result of CSCS issuing statements of securities and cash balances automatically.
  • Contact us to learn more about this project.