Managing efficiently an investment Portfolio
UBS of Switzerland uses the ELITE Management software of AZISOFT to manage operations and risk of paper it has issued to its customers based on derivative instruments. The Group Treasury (GT) department manages on behalf of the UBS Investment Bank (IB) unit a growing number of Medium Term Notes (MTN). There are 40 to 70 new issues a week for an outstanding total of 3800 active issues represent a total sum of 110 billion Swiss Francs (â¬ 72 billion, USD 100 billion). MTN are negotiable issue that consist of a bond, issued in one or several tranches and the associated swaps and short and medium term deposits individually tailored to meet the requirements of the bankâs customers. The complexity of these derivatives issues, protected by the corresponding hedging facilities is constantly growing. Managing the various securities and deposits is often handled by different bank units using different IT systems and accounting method not specifically designed for this task. Apart from the lack of transparence and high cost, operating risk is increased and can lead to execution errors and loss of reputation for the issuer.
Quality and Efficiency
To improve efficiency and reduce operational risk in the administration of the medium term note (MTN) programme, UBS AG Jersey Branch has implemented a solution based on the ELITE platform developed by AZISOFT. Commenting on the implementation a spokesman for UBS said: âIn the past, several work-arounds were required to process and book these transactions due to the very specific nature of the MTN business. With the new system implemented with AZISOFT, we have all the functionality, automation and the controls required to process the business with a minimum of risk. The user interface covers the whole range of products efficiently and the back-office functionally ensures that all events through the life of the deal are handled on time: coupon and capital payments, rate fixing and SWIFT payments and confirmations.. All departments and key users were involved from the beginning of the project and went though analysis, prototyping and tests of the system. The implemented solution is very well perceived by our users and they see its advantages in efficiency and security. In a short time, efficiency of operations has been increased and treasury management improved as support for the full life cycle of the trades, including accounting, has been integrated onto the same platformâ.
Objectives and Criteria for Evaluation
After a comprehensive evaluation exercise of suitable products, that included T24 from Temenos and Reuterâs Kondor+, UBS selected the ELITE platform from Azisoft . Selection considered both functionality and cost but also the capability of the vendor to support UBSâs growth and be able to further enhance and develop the system rapidly and cost effectively.. Past positive experience with the provider was also taken in consideration.
UBSâs objective was to implement an efficient, secure and scalable solution that was capable of reacting to market requirements in the Investment Bank and which allowed new products to be brought to market quickly.. Following the successful implementation of ELITE to support the MTN programme UBS intend to migrate other products to the Azisoft ELITE to allow their Group Treasury to run its operations on a single platform.
A flexible and secure platform
ELITE consists of modern, highly functional and secure platform with full front to back processing that supports the life cycle of the instruments issued by banks and financial institutions, with reduction of operational risk being an important element of the solution. Based on a Service Oriented Architecture (SOA) and with a three tier architecture. ELITE is highly adaptable and can be scaled to handle high transaction throughput, due to itâs architecture the system can be deployed rapidly and cost effectively and is suited to operations of all sizes. The necessary reporting tools are provided to meet the requirements of internal and external auditors as well as international reporting standards such as âBasle IIâ