Glossary · Technology & Data
Straight-Through Processing (STP)
Straight-through processing is the automated, end-to-end handling of a transaction from execution to settlement and booking, without manual re-keying or intervention.
In an STP workflow, a trade executed in the order management system flows electronically through allocation, confirmation and matching, settlement instructions to custodians and brokers, and booking in the IBOR and accounting system. Standard messaging (such as FIX and SWIFT) and electronic confirmation platforms connect the parties.
The benefits are fewer errors, faster processing and lower operational risk, which matters more as settlement cycles shorten; the move to T+1 in US equities in 2024 compressed the time available for manual fixes. STP rates — the share of transactions processed without intervention — are a common operations KPI.
STP depends on clean reference data: accurate security master, counterparty and standing settlement instructions. Exceptions still arise, so a good design routes failures to an exception queue with owners and deadlines rather than assuming full automation. Complex instruments such as bank loans and bespoke OTC derivatives usually have lower STP rates.
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