Support and descriptive data is the static information within your systems that describes counterparties, depositories and security instruments. This information is needed for processing and includes a full description of counterparties, accurate security descriptions and correct pay and deliver instructions. As you migrate to a T+1 environment, you need to focus on two main areas to ensure the ongoing accuracy and consistency of your support and descriptive data:
-Evaluate All Your Systems: Most institutions use multiple applications for trade processing. Each application may code the static data slightly differently. For example, an account in one system may be classified as a client in a second system, and as an entity in a third system. Your strategy should focus on the consistency of the data that flows through your front, middle and back offices. Inconsistencies can lead to trading delays, fails, incorrect settlement instructions, and nagging reconciliation issues.
-Analyze Input/Maintenance Procedures: Static and support data is often updated manually with new data from different external sources being input into multiple databases. Manual processing means higher costs because of the resources needed to identify and track errors and to resolve duplication and reconcilement issues. Static and support data is not only used for transaction processing, but also for monitoring credit risk, counterparty limits, and market exposure.
Experts claim that up to 25% of failed trades can be attributed to inaccurate or inconsistent support and descriptive data. Many institutions are unaware of the magnitude of this issue and the hurdles they face. Some have started projects to address these data management issues in their Trading, Accounting and Operational departments. Achieving true T+1/STP does not simply mean processing trades and settlements quicker, it means managing them better and more accurately.
SS&C's Lightning suite of products and services can help you manage your static and descriptive data and T+1/STP initiatives with:
-Omgeo and OASYS interfaces to standardize and automate trade flow.
-Security Warehouse to obtain industry standard security information.
-Internal database reconciliation processes.
-Interface Manager to your custodial banks.
-Reconciliation tools with depositories.
-Robust sharing of support and descriptive data between modules.