John Bertrand, Misys’ Midas Product Centre Manager explains, "The new features in Midas Release 4 will cover major enhancements to the system’s Lending and Treasury capabilities as well as a new Correspondence Manager product for the production of even higher-quality client correspondence. In addition, Midas Release 4 will offer Market Data Feeds for automated input of rates and prices for mark-to-market revaluations."
Midas Release 4 will also see the introduction of new client-centric components for Credit Risk and Revenue Analysis to underpin Misys’ CRM strategy. In addition, ongoing developments are already in place, which are designed to ensure compliance with Basel II capital adequacy requirements and ISO 15022, the new SWIFT message standards for T+1 securities settlement processing.
John Bertrand comments, "It is absolutely essential that our products continue to develop in line with, or even ahead of market trends and new regulatory requirements. For example, the securities market is moving towards settlement on trade date +1, and there will be an increasing need for financial institutions who are major players in the market to automate their business processing to meet this target. Securities T+1 has a knock-on effect both on payments and FX cover, since the securities market operates on payment versus delivery (PVD), requiring payments or credit facilities to be in place the following day to conclude the trade."
"The SWIFT MT5xx message formats are the generally accepted standard for securities trade processing," he continues. "However, the MT5xx message formats will need to conform to the new ISO 15022 standards, which were introduced by SWIFT in November 2001 and will become mandatory by November 2002. With more than 200 Midas client sites having licensed the system’s Securities Trading application, it is therefore, of strategic importance that Midas can offer support for the new ISO 15022 message standards."
The system’s existing MT5xx message generation facility is in the process of being converted to ISO 15022 standards, with the range of MT5xx messages produced by the system also being extended. Additionally, it is planned that Midas will incorporate facilities to automate the processing of some incoming MT5xx messages, as well as a securities reconciliation capability.
This planned new feature will provide a full securities message generation and straight-through processing (STP) solution to complement the existing STP capability available in Midas Release 4 with the Midas Funds Transfer application.
John Bertrand points out, "Another major feature of Midas Release 4 will be the new Midas Credit Risk application, which is the initial phase of a development designed to ensure compliance with the new Basel Capital Accord. The new Accord has three main tenets – to establish minimum capital requirements, introduce an enhanced supervisory review process and provide incentives to strengthen risk management procedures."
He goes on to say, "Basel II will also require banks to indicate whether outstanding positions are hedged, another facility being embedded into the new Midas Credit Risk application, which I believe will be the most advanced of any similar offering currently on the market. It will provide a customer-centric view of a client’s total business, and allow banks to set credit limits by business line, and subsequently review positions against those limits in real-time."
Another new feature of Midas Release 4 will be the provision of a Collateral Register, also customer-centric and designed to record any security or other items of value lodged by a client, against which a line of credit can be extended.
Other new facilities being made available within Midas Release 4 include support for new international accounting standards being introduced, such as FASB 133, SAS 33 and IAS 39, which relate to the US, Singapore and international markets respectively. Since the EU is planning to make compliance with IAS 39 standards mandatory from 2005, Midas Release 4 will also incorporate a market data feed-handling capability. This feature will provide automated input of rates and prices, enabling mark-to-market revaluations and accurate calculation of credit risk exposures to be carried out, in line with proposed international accounting standards.
The Midas CLS solution has already been successfully implemented at a number of banks and is being used in pre-operational CLS trials. This solution is being adopted by an increasing number of banks to ease transition into this new operational practice and becomes available as a standard component of Midas Release 4. A number of other previously trialled applications will also be offered as standard features of Midas Release 4, including support for IBAN (International Bank Account Numbers) and recent enhancements to the Midas suite of applications for Commercial and Syndicated Lending and Treasury, including major enhancements to FRA/IRS processing and the introduction of Repos processing.
John Bertrand ends by saying, "The new functionality incorporated within Midas will very quickly become mission-critical elements of every international banking system, to ensure banks are in a position to comply with regulatory changes and industry standards. Initial delivery of Midas Relelase 4, which represents the next generation of Misys’ widely-used solution, is scheduled to be available on general release from the first quarter of 2002."