ETDs represent a significant problem for firms due to their complexity and rising transaction volumes. With multiple types of settlement for different products, existing internal infrastructures for processing these instruments that have evolved on a piecemeal basis fail to provide the necessary levels of visibility or control over the transaction lifecycle. This has led to increased exception items that need to be investigated and the need to provide stronger audit and control capabilities due to increased regulatory attention.
Available as a standalone solution, or within TLM Reconciliations-Premium, it addresses these challenges by delivering an extensible data model ensures every data element can be represented, tracked, managed and reported. It supports the vast amount of data required to perform an ETD derivative match and manage the transaction throughout its lifecycle.
Rated by Celent as the most functionally rich solution on the market, TLM is developed specifically to handle high volumes and centralised utility operations through its workflow-driven approach to transaction processing. This enables efficient tracking and reporting on every underlying element of the derivative transaction from initial trade, position and margining to close out. The solution provides comparison of positions, transactions, and variation margins alongside ongoing profit and loss, year-to-date profit and loss and market valuations to ensure exposures and underlying contract value are always known.
As a result of the automation delivered by the solution, firms can reduce their costs due to fewer failed trades and exception items, and the removal of manual processes with repeatable, scalable and fully auditable processes.
Rudolf Schnepf, Senior Product Manager at SmartStream, said: âItâs clear that ETD transactions represent a significant problem for many institutions today due to their complex processing requirements and the sheer volumes of transactions. Furthermore, with increased regulatory attention on post-trade operations the need for automation in this area is clear. We have designed this new solution around TLMâs proven event workflow and exception management approach that can automate and manage high volumes of complex derivatives transactions. This will deliver much stronger root cause analysis for firms to rapidly identify why a particular transaction has failed to improve audit and control processes and aid regulatory compliance.â