SWIFT Adds BIC To LEI Directory To Its SWIFTRef Platform

SWIFT Adds BIC To LEI Directory To Its SWIFTRef Platform – New Directory Will Enable Easy Mapping Between Business Identifier Codes (BICs) And Legal Entity Identifiers (LEI)


Date 03/09/2013
SWIFT, financial messaging provider for more than 10,000 financial institutions and corporations in 212 countries, has today announced the release of a new Business Identifier Code (BIC) to Legal Entity Identifier (LEI) directory on its SWIFTRef data platform. The BIC to LEI directory has been created in response to industry demands and enables SWIFT’s clients to easily and cost-effectively cross-reference BIC reference data to the public LEI database.
The new directory will particularly appeal to securities service providers as it will simplify their derivatives trade reporting by making it easier to identify and match counterparties. Providers of securities are under pressure to improve reporting following the publication of regulation concerning unique identification of counterparties with LEI under the Dodd-Frank Act and the European Market Infrastructure Regulation (EMIR).
“As an issuer of the BIC, it is a natural step for SWIFT to provide a directory to facilitate BIC to LEI mapping,” said Patrik Neutjens, Head of Reference Data at SWIFT. “There is an increasing need for clear and accurate identification of legal entities engaged in financial transactions to monitor systemic risk across the global financial network. SWIFT’s new BIC to LEI directory will help provide this.”
The Business Identifier Code (BIC), also known as ISO 9362, is a standard format identification code for both financial and non-financial institutions allocated by SWIFT and is the most commonly used international identifier for financial institutions. SWIFT has issued more than 100,000 BICs worldwide.
In line with SWIFT’s announcement earlier this year that it is providing daily updates on its SWIFTRef platform, the BIC to LEI directory will be updated on a daily basis. SWIFT calculates that in a typical month approximately 1,400 BICs undergo one or more changes, so the directory will prove valuable for the financial institutions and corporations who process thousands of domestic and international payments daily, and face a major challenge in maintaining accurate, up-to-date data.
The BIC to LEI mapping is already available to existing SWIFTRef Bank Directory Plus customers, via the SWIFTRef website download portal, and through FileAct, SWIFTRef’s regular file messaging service. It can also be accessed in the online tool Bankers World Online. In addition, a separate directory with the BIC to LEI mapping is now available for SWIFTRef users.
For more information about SWIFTRef’s new BIC to LEI directory, please visit http://www.swift.com/SWIFTRef.

Ageing systems limit North American buy-side offerings

Ageing systems limit North American buy-side offerings

More than four of five North American asset managers rely on complex workarounds to support derivatives trading through aging middle- and back-office systems, a poll has found.

A poll conducted by investment management consultancy SimCorp has found 82% of North American buy-side respondents rely on cumbersome workarounds to support derivatives trading, which limits firms’ ability to engage in new product offerings.

A further 52% said their current systems required more than two months preparation to launch a new investment product and 22% said launching new derivatives products took four months or longer. In addition, 4% of firms said current systems did not allow for any new investment products to be launched.

Over one-third of respondents said the accuracy of client reporting was compromised due to the fragmentary, disconnected way that transactions were processed through legacy systems.

SimCorp polled nearly 135 executives from 84 North American buy-side firms.

David Kubersky, managing director for SimCorp, said firms should look to introduce an investment book of record to serve as a single source of information spanning front- to back-office operations.

“This system should offer integrated workflows in managing cash, margins, deliverables and collateral, accurate reporting and the ability to quickly introduce new products to market,” he said.

Post-trade outage drives pre-trade regulation

Post-trade outage drives pre-trade regulation


For the first time in the modern era, issues related to the post-trade formation and dissemination of a consolidated quote brought trading in Nasdaq-listed stocks and equity options based on those stocks to a halt for approximately three hours on 22 August.

Unlike Nasdaq OMX’s infamous May 2012 Facebook initial public offering (IPO) failure, which involved Nasdaq OMX exchange systems and eventually cost the company US$10 million in fines from the US Securities and Exchange Commission (SEC), Thursday’s trading outage is thought to involve systems which route securities data to the exchange.

“Over the next few days, Nasdaq OMX is in the unenviable position of being seen by the public as the source of the problem, even though we do not know where the failure occurred,” explains Robert Stowsky, senior analyst with industry research firm Aite Group. “It could have been a problem at the securities information processor (SIP) or in one of the exchanges contributing data to the SIP.”

The role of SIPs in the US equities markets is to collect equity trade quotes and completed trade data for eventual distribution and publication.

In the case of Nasdaq OMX, it administers the SIP used to create the consolidated quote for Tape C securities, which consist of Nasdaq-listed equities, and is managed by the OTC/UTP operating committee, which represents the 12 US exchanges that trade Nasdaq-listed securities and the Financial Industry Regulatory Authority (FINRA) that operates the Trade Reporting Facility, which is used by alternative trading facilities (ATFs) to report their trades.

A separate industry organization, the Consolidation Tape Association, oversees the formation and dissemination of the Tape A and Tape B consolidated quotes, which consist of securities listed on the New York Stock Exchange (NYSE) and American Exchange (Amex) respectively.

“This is more a market infrastructure issue rather than a single-exchange issue,” adds Stowsky. “It just happens that Nasdaq OMX maintain the Tape-C SIP in this case.”

According to the limited information provided by Nasdaq OMX, which declined requests for comment, the SIP administrator began to notice a degradation in quote and trade distribution due to a connectivity issue. Nearly 75 minutes after Nasdaq OMX first identified the issue, the exchange halted trading in all Tape C securities. It then halted trading in all options trading based on those securities 12 minutes later. It was not until 51 minutes after Nasdaq OMX halted its trading of Nasdaq-listed securities that it implemented a regulatory halt in trading of all Tape-C securities.

The SIP managed to resolve the issue in 30 minutes, said Nasdaq OMX officials and began a phased re-start of trading at approximately 15:25 ET.

Although trade resumed prior to the closing bell, the industry and investors found it quite disconcerting.

“Any system that is as strategic to the operation of the US equities markets, such as a market utility like the SIP, that required 100% up-time should have had ‘hot’ failover capabilities,” said William Karsh, a special advisor at the National Stock Exchange (NSX). “Every system, which is critical to the US market system, should have this capacity.”

Karsh suggests that the SIP administrator or oversight committee put together plans or have processes in place to prevent similar events in the future. “If any participant acts in a manner that jeopardises a system’s performance and affects fellow users of the system, there should be a way to block the participant so that behavior does not cause the system to fail,” he adds.

The failure follows other serious technology problems for Goldman Sachs, which released a rogue algorithm on 20 August, which caused havoc with its options trading.

Goldmans’ algorithm sent erroneous options orders in the early minutes of the trading day and could cost the investment bank up to US$100m. Exchanges are currently in the process of identifying which order should be cancelled and the full cost may not be known for some time.

Regulatory knock-on

The trading outage comes at a time when the SEC is focused on trading systems and technology, having recently ended the comment period of its proposed Regulation Systems Compliance and Integrity (Reg SCI) on July 8.

If the regulation is implemented as written, it will replace the SEC’s voluntary compliance system for developing, testing and maintaining systems critical to the operation of the US equities market.

Aite’s Stowsky, sees the regulators sharing some culpability in the trading outage due to the SEC’s implementation of Regulation NMS, which created the current market structure.

Whenever there is an industry utility, it introduces a potential single-point of failure, he says and doubts if the distributed market structure has been tested rigorously.

“My experience in the industry is that organisations tend to squeeze the testing and quality assurance as they approach product delivery deadlines.”

Stowsky is also sure that politicians, and hence the regulators, will be following the reasons for the trade outage closely since it affects the perception of the US equities market as a fair and well run market.

“Anything that shakes that view will move to the top of their legislation or regulatory priority list.”

Riyad Bank chooses Calypso for front-to-back-office support

Riyad Bank chooses Calypso for front-to-back-office support


London – Calypso Technology has been selected by Saudi Arabia based Riyad Bank to provide treasury operations and structured product front-to-back-office support. The Calypso system will be rolled out cross-asset in the bank’s operations to support structured products and hedge accounting.

Riyad Bank, looking to update front-to-back-office systems and operations, will change from a process based operating model to a more efficient exception-based one, significantly improving its straight-through-processing (STP) rate. Additionally, the bank will align its treasury operations with international and Islamic financial industry standards. Calypso will support the cross-asset requirements of the bank’s business covering its FX (cash and derivatives), money market, interest rate derivatives, fixed income and commodities (including precious metals and derivatives) operations.

Riyad Al-Zahrani, EVP Operations at Riyad Bank, said, “It was important for us to select a vendor that would deliver industry best practices, front-to-back-office support for structured products and cross-asset capabilities as well as the Shariah-compliant support that is critical for our market and for growing the business regionally. We went through a robust selection process during which Calypso outperformed other solutions in areas of functionality, flexibility and technology.”

Charles Marston, Chairman and CEO of Calypso, states, “We look forward to working with Riyad Bank, a key Saudi Arabian financial institution and market leader. Calypso remains committed to servicing the Middle East and Saudi Arabia in particular, a principal centre in Shariah finance. The region is of increasing importance in global finance and we are pleased to be a part of this dynamic and vibrant marketplace.”

Omgeo and Eze Software partnership brings middle-office efficiencies to the buy side

Omgeo and Eze Software partnership brings middle-office efficiencies to the buy side


New York/Boston/London/Hong Kong/Singapore – Omgeo and Eze Software Group have announced the launch of an interface to fully automate futures and options matching between the Eze OMS and Omgeo Central Trade Manager, a central matching solution for domestic and cross-border exchange-traded derivatives, equities and fixed-income transactions.

The new interface has been developed using Omgeo CTM’s native XML messaging format and aims to improves both the speed and capacity with which trades and trade statuses can be delivered between the two systems.

Chris Corvi, Director of Product Management for the Eze OMS at Eze Software Group, said: “Our clients increasingly demand fully integrated workflows across their trading and post-trade operations. Omgeo CTM enables us to offer the benefits of Omgeo’s central matching solution directly through the Eze OMS, increasing the overall efficiency of their workflows and bringing scalability to the confirmation, allocation and matching processes.”

Ted Leveroni, Executive Director of Derivative Strategy and External Relations at Omgeo, said: “Futures and listed options have become integral parts of buy-side trading strategies, and firms need to ensure their trade processing capabilities can keep up. This link will help users eliminate unnecessary risk while improving efficiencies across the trade lifecycle, with equities, fixed income and ETD trades processed from a single platform.”

The Eze OMS also links to Omgeo OASYS, an allocation and confirmation service for US securities. Together, Eze Software Group and Omgeo have more than 175 clients live on their joint offerings.

Ted Leveroni, executive director of Derivative Strategy and External Relations, Omgeo

Ted Leveroni, executive director of Derivative Strategy and External Relations, Omgeo

“This link will help users eliminate unnecessary risk while improving efficiencies across the trade lifecycle.”

eClerx offers new solutions for credit and risk management

eClerx offers new solutions for credit and risk management


New York – eClerx, the provider of knowledge and business processing to the financial services industry, has launched its ISDA Credit Support Annex (CSA) Document Risk Review solution that allows financial institutions to strategically mine information from CSAs for management of credit and legal risk, optimization of cash and collateral, and operational risk mitigation. Firms can leverage the data pre-trade to enable correct pricing of derivative trades, and post-trade to optimize collateral movements across counterparties.

As a result of regulatory mandates such as Basel and Dodd Frank living will requirements, as well as the increased demand for collateral due to OTC clearing, the information in ISDA CSA documents has become critical to firms’ credit risk management and planning. On average, more than 65% of agreements contain discrepancies when compared against representations in client systems. By leveraging eClerx’s ISDA CSA Document Risk Review solution, users gain access to information clients have legally agreed to but do not have the ability to systematically act upon, due to the unstructured nature of the information embedded within faxed PDF documents and image files.

“The industry is challenged by the complexity of screening the data in their ISDA CSA documents,” said Mahesh Muthu, Associate Principal at eClerx. “Our new ISDA CSA Document Risk Review solution will allow firms to utilize that information through eClerx’s strategic decision analytics facilitated by a metrics and analytics suite. By engaging with a third-party expert, financial institutions can leverage the toolset and processes already developed and mastered, allowing their internal teams such as legal, credit valuation adjustment (CVA) trading desks, and treasury, to focus on optimizing day-to-day decisions with a more accurate, granular dataset. With pending regulations, firms need to ensure they have a comprehensive solution in place to remain competitive while managing costs.”

The ISDA CSA Document Risk Review offering provides clients with:

• Electronic, usable records of agreements which can be mapped and reconciled to client systems or used as a golden source repository, facilitated by a system based dual capture and audit methodology

• An operational reporting suite summarizing discrepancies between systems and electronic CSA records, benchmarking against industry standards and portfolio averages, and isolating legally unenforceable documentation

• An analytics suite customized for various consuming departments, such as client on-boarding, legal, credit valuation desk (CVA), credit risk, operations and liquidity management

In addition to the new product, clients will also have access to eClerx’s existing pre‐validated capture forms, taxonomical database and data capture rule set, as well as an operational reporting suite to govern the process and analytics suited to each consuming department within a financial firm.

SS&C PORTIA Connects to SS&C’s Investment Intelligence Solution

SS&C PORTIA Connects to SS&C’s Investment Intelligence Solution


SS&C Rolls Out Its Newest Technology Platform to SS&C PORTIA’s Client Base

SS&C Technologies Holdings, Inc. (Nasdaq:SSNC), a global provider of financial services software and software-enabled services, today announced that SS&C PORTIA, a leading middle-to-back office investment operations platform, is connecting to the SS&C Investment Intelligence platform.

For investment managers, getting the data they need, when they need it, is essential to making smart and timely decisions. SS&C Investment Intelligence enables users to turn data into actionable insights by aggregating information from multiple systems, providing easy to use tools for analyzing data, and enabling access to reliable information anytime, anywhere, through browser and mobile-based platforms.

Now that PORTIA is connected to this platform, firms can combine the investment information from PORTIA with pertinent data from other sources and deliver it in a customizable format to address the unique needs of all types of users.

“SS&C is focused on meeting the needs of global financial services firms that want to leverage vast quantities of data across their systems and take advantage of new technologies such as mobile and cloud,” said Bill Stone, Chairman and Chief Executive Officer, SS&C Technologies. “SS&C Investment Intelligence allows firms to easily aggregate data into meaningful information from multiple sources, so they can make smarter investment decisions, improve agility and reduce costs.”

“The Investment Intelligence platform is a great example of how SS&C PORTIA is leveraging SS&C’s capabilities to offer clients expanded functionality,” said Christy Bremner, Senior Vice President and General Manager, SS&C PORTIA. “By utilizing this new platform, we are able to support one of the biggest challenges our clients face — getting detailed, timely information in a format that is easy to digest and accessible where and when they need it.”

SS&C PORTIA provides a broad set of middle-to-back office capabilities to allow investment managers to track and manage the day-to-day activity in investment portfolios to support global accounting requirements. Offered on a deployed and hosted basis, the solution supports a wide range of functions including corporate action processing, internal reporting, client reporting, regulatory reporting, performance measurement and attribution and post trade compliance.


The Asset – Magazine-Facilitating Growth in Asia through Shared Services

The Asset – Magazine-Facilitating Growth in Asia through Shared Services.

S&P Capital IQ launches cross referencing tool

S&P Capital IQ launches cross referencing tool

S&P Capital IQ’s Business Entity Cross Reference Service provides cross-referencing capabilities to standardized and proprietary market identifiers



London – S&P Capital IQ, the provider of multi-asset class data, research and analytics, has launched a new tool intended to identify systemic and counterparty risk while reducing operating costs.

Its new Business Entity Cross Reference Service provides cross-reference capabilities for over 2 million public and private entities using standardized and proprietary identifiers, including all available Legal Entity Identifier (LEI) codes.

“We have developed this cross-reference tool to aid market participants with their mandates to satisfy greater regulatory requirements, solve for lack of standardization, and remove the burdensome task of processing and tracking legal entity structures” said Rui Carvalho, Managing Director, S&P Capital IQ. “The need for meaningful and broad transparency has created a host of new regulations mandating new and enhanced risk measurement criteria.”

“Firms that manage different sources of information need to understand and maintain, on a daily basis, the linkages between instruments, entities, issuers, securities and sector classifications for better geographical and counterparty exposure reporting” said Roger Fahy, Vice President, S&P Capital IQ. “This is what our solution provides.”

ConvergEx upgrades pre-trade risk controls for ConnEx (FIX as a Service)

ConvergEx upgrades pre-trade risk controls for ConnEx



New York – ConvergEx Group has announced that ConnEx, its outsourced hosted connectivity infrastructure business, has launched an updated version of its pre-trade risk management system, ConnEx Risk Management.

“There have been a number of recent market events and new regulations that have highlighted why risk management continues to be a very important and ever-evolving topic in our industry,” said George Rosenberger, managing director and head of ConvergEx’s ConnEx.

With this upgrade, ConnEx customers can configure risk controls for their clients using additional pre-trade checks. The interface allows users to create customized client groups which can have one set of risk parameters or create a customized risk profile on a client-by-client basis. The software is deployed directly to ConnEx customers and the interface allows them to assign buying power, credit and risk checks for their underlying clients.

The new version of ConnEx Risk Management also addresses the challenge of multiple internal trading platforms that sell-side firms are faced with. This decentralization creates a challenge to administer consistent risk checks for all of their clients. However, by centralizing all client inbound connectivity through the ConnEx FIX gateway, ConnEx customers can administer consistent risk checks regardless of the trading system their client is using or the internal trading platform that the order is destined for.

“Sell-side firms need to invest in up-to-date risk management tools now to make sure that they have the right controls in place to help protect themselves against an unexpected market event today or in the future,” concluded Mr. Rosenberger.

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