OTC DERIVATIVES CASHFLOWS FULLY AUTOMATED FOR FIRST TIME WITH GROUNDBREAKING SYSTEM FROM SCRITTURA

§ First cross-product, total trade life-cycle STP system for OTC derivatives cashflow
§ Provides solution for banks working towards International Swaps and Derivatives Association cashflow matching targets

08 November 2004 – London – Scrittura, the leading provider of documentation automation technologies, has today launched Cashflow Matching - the first STP solution for OTC derivatives cashflow that is both cross-product and covers the whole life-time of the trade. The new system has been developed in response to recommendations made by the Cashflow Matching Working Group of the International Swaps and Derivatives Association (ISDA), the global representative body for the over-the-counter (OTC) derivatives market.

All traded derivative instruments have a cashflow as part of the underlying contract. The cashflow cycles differ between instruments – credit derivatives pay cashflows on the same day each quarter, whereas interest rate derivatives pay irregularly. The ISDA strategic plan gives banks a deadline of 2006 to have systems in place that undertake cross-product matching and netting of cashflows across all OTC transactions for any settlement date. The Scrittura solution is the first to enable banks to meet these exacting requirements.

Scrittura Cashflow Matching generates a SWIFT cashflow payment message, matches via a central utility and then delivers a confirmation to the counterparties. Cashflows are netted into one message, which significantly reduces the cost of SWIFT processing. Furthermore, Scrittura’s is the only solution in the market place to offer realtime matching rather than batch-processing.

The ability to carry out automated matching in real time reduces risk by reducing timeframes for confirmation processes and eliminating errors. Automated matching lowers costs by eliminating expensive, labour-intensive manual processing.

Market leaders are currently trialling Scrittura’s Cashflow Matching product.

John H. Lewis, Chief Executive Officer, Scrittura comments: "The need to move towards a fully automated STP environment is a pressing challenge for firms trading OTC derivatives. We are pleased to support the regulator’s drive to bring efficiency and automation to the market. Our unique cross-product, cashflow matching service is fully integrated with Scrittura’s front- to back-office STP solution, making it possible for the first time for firms to meet the demands of the ISDA strategic plan."

Become a bobsguide member to access the following

1. Unrestricted access to bobsguide
2. Send a proposal request
3. Insights delivered daily to your inbox
4. Career development