#PostonTradFi What is Post-Trade Operations (TradFi)?

In traditional finance (TradFi), the post-trade process refers to all activities that occur after a trade is executed and before it is fully settled (the final transfer of funds and assets). It is considered the backbone of market stability.

Xceptor

This process is mainly divided into 3 steps:

Clearing: This involves reconciliation of transaction data between the buyer and the seller to ensure that both parties have the necessary funds and securities.

Investopedia

Settlement: This is the final stage where the shares or securities are legally transferred to the buyer and the money goes into the seller's account.

AFME

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Custody & Reporting: Recording assets in a secure central depository and reporting them to the relevant regulators as per the regulations.

LSEG

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The Importance and Changes of Post-Trade in TradFi

T+1 Settlement: Recently (as per SEC regulations), the settlement time in traditional stock markets has been reduced from T+2 to T+1 (i.e. settlement on the very next day of the trade) to reduce risk and time.

Investopedia

The role of companies like Baton Systems: Fintech companies like Baton Systems provide TradFi institutions with low-code and distributed ledger (DLT)-based automated tools that reduce settlement risk by up to 90% by matching cash and assets in real-time.

Baton Systems