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BNY Mellon and Deutsche Bank partnership to improve custody FX for restricted EM currencies



Banking and financial services holding company BNY Mellon and Deutsche Bank have developed together a new API-enabled FX solution that can make significant improvements to the confirmation times for restricted emerging-market currency trades.

The digital solution was initially applied to custody FX transactions in Korean Won. The solution aims to reduce the pre-trade lifecycle from hours to second, minimizing the operational burden and manual intervention encountered in emerging-market custody FX.

Already live in Korea, the solution targets the Indonesian Rupiah and the Indian Rupee next. It will subsequently be rolled out to a broad range of restricted currencies, which are linked to investors’ underlying equity or fixed-income transactions.

partnership

The solution will utilize existing bots between the two banks for fast communication to help eliminate market frictions. It can also bring trade remediation closer to the time of execution. As a result, the benefits can also reduce price slippage for clients between the FX leg of a transaction and the equity or fixed-income security trade.

Jason Vitale, Global Head of FX at BNY Mellon commented:

Jason Vitale, BNY Mellon
Jason Vitale

We are constantly looking at ways to introduce cutting-edge technology for the benefit of our clients. With this partnership, we are not only seizing an opportunity to alter back-office processing in restricted markets, but more importantly, we are providing front-office users with faster execution and enhanced workflow transparency.

David Lynne, APAC Head of Fixed Income & Currencies, and Corporate Bank, at Deutsche Bank said:

This is a milestone in solving a long-standing challenge in emerging markets, with broad application for the industry and our clients. This demonstrates our commitment to market leading execution, at a time when investor participation and focus on costs in these markets are increasing.  The collaboration between the two organizations leverages our strengths and expertise in emerging markets, custodial FX, as well as digital work-flow and innovation.

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BNY Mellon and Deutsche Bank partnership to improve custody FX for restricted EM currencies

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