SocGen and Capitolis Bring Full Automation to FX Options Novations
Societe Generale’s prime-brokerage arm has rolled out a fully automated, or “straight-through,” system for transferring FX option contracts between counterparties—a long-standing pain point in derivatives operations.
The new setup, built with fintech firm Capitolis, lets clients move options portfolios without the email chains and spreadsheet reconciliations that have sluggished the market for years. The first live user is an asset-management client, and the bank says the process can now be extended to other dealers.
Novating an FX option—replacing one counterparty with another while keeping identical economics—sounds simple on paper but has historically required multiple confirmations and re-keyed trade data. “It’s an area crying out for automation,” said Gil Mandelzis, Capitolis’s founder and chief executive, when announcing the service.
By embedding Capitolis’s workflow directly into its internal booking and risk systems, SocGen Prime Brokerage can now process novations end-to-end without human intervention. The move follows years of regulatory pressure to through straight-through processing, a goal championed by the European Central Bank and industry body ISDA.
Capital rules make the plumbing urgent
The upgrade lands amid growing balance-sheet pressure from SA-CCR, the standardized approach to counterparty credit risk that regulators in the U.S. and U.K. enforced in 2022. The rule change increased capital charges on derivatives exposures, prompting banks and purchase-side firms to compress, rebalance, and novate trades more frequently. Doing that securely at scale requires automation.
Capitolis, founded in 2017 by Mandelzis—formerly head of EBS BrokerTec—alongside ex-Thomson Reuters chief Tom Glocer and engineer Igor Teleshevsky, specializes in exactly that. Its cloud network already runs optimization “cycles” where tear up offsetting FX and rates positions to cut capital usage. Investors include Andreessen Horowitz, Index Ventures, Sequoia Capital, and several major banks.
Until now, most novations relied on manual workflows: operations teams circulated consent forms, updated records in risk systems, and reconciled discrepancies by hand. The new flow routes a client’s request through Capitolis’s platform, coordinates the required tri-party consents, and feeds the completed engine—no re-keying, no follow-up calls. Cycle times drop from hours to minutes.
The change mirrors the broader post-trade modernization sweeping through prime brokerage. Rivals such as OSTTRA—the joint venture combining MarkitServ, Traiana, TriOptima, and Reset—handle the majority of global trade-processing traffic. Capitolis competes at the higher-value layer of optimization and novation, viewking tighter hooks into those legacy networks.
Why clients care
For , automated novations translate into smoother portfolio rebalancing and fewer breaks when shifting exposures or changing prime brokers. For banks, they mean lower operational losses and quicker throughput during volatile periods, when dozens of counterparties may want to re-paper trades simultaneously.
Supervisors have long warned that manual novation backlogs can magnify stress events—echoes of the 2005 credit-derivatives confirmation crisis that first spurred ISDA to design standardized protocols. Capitolis and SocGen’s launch effectively digitizes those standards.
Both firms said the STP link will expand to other FX instruments and dealers. Industry observers expect further integration with the large clearing and affirmation stacks run by OSTTRA and DTCC, making cross-platform transfers seamless. Analysts also note that SA-CCR is pushing firms to run optimization cycles monthly rather than quarterly, reinforcing the need for automated post-trade infrastructure.
