Securities Transfer Systems (STS)
STS provides support for trading U.S. Government and Agency securities. These securities are held by the FED, with trades processed through the Federal Reserve's NBES (National Book Entry System), accessed via the Fedline Direct interface. This interface offers superior automation and processing opportunities over the low volume Fedline Advantage alternative.
The system provides support for electronic delivery and receipt of trade transactions between the FED and a member bank, while supporting the intraday settlement processing associated with these transactions. Trades may be captured by interface with host securities processing systems or by message preparation on STS workstations. Typically, current security positions and settlement day trades will be received from the host system daily as batch data. Messages will be created for sell transactions and transmitted to the FED. Buy transactions will be posted as pending. Incoming messages will be automatically matched to pending transactions. The system will maintain the current position for each security within the FED subaccounts throughout the day. Periodically and at end of day, position and transaction information is available for delivery back to the host system.
STS workstation operators may enter intraday trades directly, including buys, sells, loans, repurchase agreements, rewires and account transfers. Messages may be optionally verified prior to release. Exceptions are isolated for operator resolution. Message preparation supports full view of all transaction data in a windowed environment. Par and cash positions are maintained and made available for query. Reference data is maintained to facilitate the data entry process. Significantly, in addition to asynchronously attached workstations, STS supports LAN environments, offering a wide variety of distributed processing configurations.
The application facilitates the daily reconciliation of FED holdings, and provides an extract of wire and position activity. Cash transactions are reported and can be passed to Daylight Overdraft Systems.
Message preparation is enhanced by extensive use of a reference database, including mnemonic assist delivery instructions. Batch entry capabilities are available to improve efficiency and accuracy of high volume trade entry. End of day balancing with the FED is simplified. Repurchase Agreement processing includes batch entry of collateral and automatic processing of collateral on the return date.
Configurable to support the requirements of both the moderate and high volume bank, STS offers significant advantages over alternative automation solutions, including: