Yesterday, IBM announced that Indeval, Mexico's central securities depository (CSD), is using IBM ILOG CPLEX. Indeval settles $250B of securities trades per day, one fifth of Mexico's GDP. The innovative new system allows Indeval to settle securities in near real-time. This has saved financial institutions more than $240 million in daily interest in eighteen months.
Previously, Indeval, like most CSDs around the world, operated a settlement system that required banks to hold liquidity of billions of dollars while securities were being settled. Linking the delivery of securities to their corresponding payment requires depositors to have adequate financial resources available to settle their trades. Financial institutions may have to borrow if they do not have sufficient funds to settle stock and debt trades.
At the heart of Indeval's Dali securities settlement system, the IBM ILOG CPLEX Optimizers match thousands of transactions simultaneously, so that only net amounts of securities and cash need to be transferred among the participating financial institutions. This tremendously reduces the amount of cash and securities the institutions need to have on hand to settle the transactions.
Indeval won the 2010 Edelman Award from INFORMS (Institute for Operations Research and the Management Sciences) for this work.