UBS and CIBC have settled an intraday FX swap on the Finteum Platform in a "world first".

Finteum is a London-based start-up which has built an interbank funding order and a trade management platform.

The platform, which was used in the transaction, is built for intraday funding using FX swaps and repo as financial products.

The distributed ledger technology (DLT)-enabled platform specialises in trades that "last hours instead of days", with the aim of circumventing unnecessarily long trades so that banks can meet customer obligations more quickly; reduce their HQLA requirements; and meet increasing regulatory expectations to fund payment activity in real-time.

The Finteum Platform uses R3’s Corda, an open, permissioned, distributed platform for regulated markets.

DLT enables both parties to a trade to send money and securities to each other, without needing to exchange and reconcile MT300 or similar confirmation messages.

Post-trade actions such as 'early maturity’ or cancellation of a trade are also agreed through the Finteum Platform.

Rupert Hume-Kendall, former chair of Bank of America Merrill Lynch International, who recently joined as Finteum's vice-Chair and as a board member, said that recent regulatory focus has highlighted the need for banks to have access to multiple tools and sources of liquidity.

"Intraday FX swaps and intraday repo are recognised to be an increasingly important part of liquidity management strategies at global banks and we’re excited to be working with many of the world’s largest banks to bring this new technology to fruition and reduce their costs," he continued.

Anthony Clark-Jones, who leads the Strategic Ventures portfolio at UBS Investment Bank said that the move marks a step towards institutions and their partners realising the "commercial, risk-associated and client-related benefits of truly digital capital markets".

He added that the transaction compliments recent progress elsewhere in areas such as institutional digital cash and digital collateral.

The FX swap comes after a trial in April for USD intraday repo with 14 global bank participants, with simulated settlement, which Finteum said demonstrated the potential of the intraday repo market.

The company said that it is building out the second wave of banks that will go live on its platform in 2024, with live Finteum Platform repo trades expected later this year.

---