STP break puts banks at risk

Wolfgang Prinz, product manager at SmartStream in Vienna said that because some settlement members -- the banks that settle trades on CLS on behalf of third-party banks -- do not send confirmations on integrated systems, third parties must manually look up the status of trades on their settlement members' web browsers, thereby cutting STP.

"It's a break in STP and what did we introduce STP for? To reduce risk," said Prinz. "These banks are replacing settlement risk with operational risk."

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