Derivatives    



The Market
  • The credit derivatives market grew by 106 percent in 2005 with an overall notional amount of $17.1 trillion
  • Investment Managers have invested hugely in technology with over 50% now using or planning to use Swapswire and DTCC over the next 12 to 24 months (Z/Yen Survey)
  • According to Z/Yen, the CDS processing costs among major dealers today stands at around $233, but could dip below $100 mark inside four years. At the current rate, the top five dealers spend over $60m per annum just on operations.
  • The pace of innovation (in terms of newer instruments and use of technology) in the front-office has outpaced the corresponding changes necessary to the middle/back-office systems to handle these new instruments resulting in increased risk and post-trade processing costs.
  • The manual processes in place today by the market participants are not scaleable with continued growth and hence the push on automation from all fronts including regulators.
  • Increased interest in long-only managers to invest in alternative instruments in search of alpha has also contributed to the growth in the credit derivatives space thus resulting in strain on middle/back-office systems/personnel as the current systems cannot handle these instruments.
The Problem
  • Lack of automation in post-trade processing of OTC derivatives 
  • Lack of flexibility in settlement infrastructure to handle structured derivative instruments 

Our Offering
  Consulting Services
  • Lack of flexibility in settlement infrastructure to handle structured derivative instrument 
  • Implementation of the following front/middle/back-office functions
    • Trade Management
    • Reconciliation
    • Documentation Management
    • Collateral Management Support
    • Pricing and Valuation
    • Reporting
    • Security maintenance and Position monitoring
    • Cash Management
    • Corporate Actions Monitoring
    • Accounting
    		 
 
      • Trade Management
      • Reconciliation
      • Documentation Management
      • Collateral Management Support
      • Pricing and Valuation
      • Reporting
      • Security maintenance and Position monitoring
      • Cash Management
      • Corporate Actions Monitoring
      • Accounting
 

Integration Services

  • Help integrate best of breed products to provide STP for OTC Derivatives
  • Integration with Deriv/SERV, Swapswire and Markit’s services

Value Proposition
  • Experienced team with hands-on experience working on processing OTC Derivatives for Front, Middle and Back office
  • Our OTC framework allows for quick integration with the best of breed products to provide you with an efficient post-trade processing solution
  • The framework’s flexible and extensible components allow for faster time to market
 

Key characteristics of the components

  • Functionally complete
  • Flexible
 
  • Our smart use of technology provides a way to handle changing business needs and addition of newer instruments without major upgrades
  • Extensible
 
  • Provides mechanism to customize functionality based on client specific needs