Broker Confirmation Matching

LEAP – Electronic Broker Matching Mission Statement

Opportunity

Within LEAP the opportunity to facilitate the creation of an electronic broker matching solution has been identified. The opportunity initially surrounds oil derivatives trades globally and US/Canada crude/products pipeline trades, as these are most standard and thus are most conducive to being matched electronically and represent a significant proportion of brokered trades.

Matching methods

Electronic matching may be accomplished:

  1. Multiple standards – Via bilateral discussions between the broker and its client to adopt a particular matching platform(s) and to transmit data electronically in a match-able format, e.g. API file, broker spreadsheet or some other electronic means.
  2. Single standard – By LEAP facilitating the creation of a common standard approach to transmission of trade data, available to the industry, which LEAP members have a voice in its creation/maintenance that would allow brokers and clients to adopt one standard to accomplish electronic matching as opposed to having to potentially adopt multiple standards as is the case today.

Key enablers

Key components in establishing an electronic broker matching solution are:

  • Availability of matching platforms and schemas to enable matching of various trade types.
  • Agreement by brokers to submit trade data in a format that can be electronically matched per one of the Matching Methods above.
  • Agreement by broker and client to use a particular platform.

Overall Benefits

  • By electronically matching brokered trades, confirmations controls become more efficient, timely and robust helping to mitigate potential exposures and profit leakages by improving trade confirmation accuracy by removing potential for human error.
  • Use of an electronic broker matching solution may also assist clients in meeting regulatory requirements surrounding the confirmation process.
  • Adoption of a common standard to transmission of data will facilitate the use of multiple matching solution choices with minimal additional work involved on the part of the broker/client and could also be utilized in the counterparty contract matching space.
  • Adoption of electronic broker matching will help drive best in class practices.
  • Will lend clients support in future business growth and make us all a little greener.

* NB LEAP members are not compelled or obligated to use any particular broker matching solution and are free to use or reject any matching solution under consideration. Naturally, broker matching and vendor choices are contingent on individual commercial considerations that are unique to each counterparty, which LEAP members must individually undertake to review and assess, it being understood that every member remains free to use whichever brokers and vendors it wishes to use.