ICMA ERCC publishes Best Practices on pair-offs and error trades for consultation


20 May 2024 ICMA’s European Repo and Collateral Council (ERCC) has published today two separate sets of proposed best practices for wider market consultation:

  • Pair-offs: As part of the ERCC’s ongoing efforts to support post-trade efficiency and help reduce settlement fails, the ERCC has been working on guidance in relation to ad hoc bilateral netting or “pair-offs”. The objective has been to help standardise the pair-off process, in order to make manual pair-offs more efficient and to facilitate automation, which would make an important contribution to settlement efficiency. The related work was led by the ERCC Operations Group resulted in a proposed checklist for bilateral pair-off agreements, including guidance on the related workflow and deadlines, both agnostic to the underlying technology.

  • Error trades: Following initial bilateral discussions with trading platforms, the ERCC worked on a set of best practices related to cancellations by Automatic Trading Systems (ATS) of trades that have been executed in error. The resulting ERCC recommendations provide some high-level guiding principles which aim to ensure consistency of error cancellation policies across the various platforms. The proposed recommendations have been prepared based on input from ERCC members and subsequently endorsed by the ERCC Committee. However, wider feedback, especially from the relevant ATS providers would be very welcome.

The ERCC invites all market participants as well as the relevant infrastructure and service providers to review the proposed recommendations published today and to provide feedback. If you have any comments or additional suggestions on either of the documents, please reach out to us at ercc@icmagroup.org.

ICMA Zurich
T: +41 44 363 4222
Dreikönigstrasse 8
8002 Zurich

ICMA London
T: +44 20 7213 0310
110 Cannon Street
London EC4N 6EU
ICMA Paris
T: +33 1 8375 6613
25 rue du Quatre Septembre
75002 Paris

ICMA Brussels
T: +32 2 801 13 88
Avenue des Arts 56
1000 Brussels
ICMA Hong Kong
T: +852 2531 6592
Unit 3603, Tower 2
Lippo Centre
89 Queensway, Admiralty
Hong Kong
info@icmagroup.org (general enquiries)
education@icmagroup.org (education enquiries)
sustainabilitybonds@icmagroup.org (sustainable finance)
Copyright © 2024 International Capital Market Association.