A mechanism which is developed to automate the end-to-end processing of transacting in financial instruments, replacing the conventional T+3 trading with same-day settlement. With STP, transactions can be electronically captured and processed in one “pass”, i.e., from deal initiation to final settlement. Put another way, STP makes it possible to transfer information on financial transactions- that has been electronically entered- from one party to another without the costly multiple re-entering of data from paper documents and other sources. As such, STP is instrumental in eliminating errors, discrepancies and delays in the settlement process. It also helps to speed up the entire cycle by eliminating time-consuming human intervention.

A single system can process or control all elements of the work flow required to handle a financial transaction. This includes the front, middle, and back offices, in addition to general ledger. Embracing STP allows more cost-effective processing, confirmation and clearing of orders, all with fewer errors. Furthermore, real-time processing helps boost expansion of electronic trade. STP also lowers transaction costs and risks and reduces failures in back-office activities.