Torstone Technology, providers of securities and derivatives processing software to the global financial markets, has secured a new contract for the provision of Inferno for post-trade securities processing and trade accounting at London-based Daiwa Capital Markets Europe (Daiwa Europe). The four year deal, negotiated with Daiwa Institute of Research – the global systems integration and research arm of Daiwa Securities Group – will involve the ongoing use of Torstone’s Inferno for convertible bonds and associated equity/hedge products, and for FX/MM treasury functions. The firm’s cash equity business will also move to the system by the end of 2012 and fixed income securities will follow in 2013. Inferno will then become the sole back office system in use by Daiwa Europe.
Daiwa Europe is the wholly owned investment banking subsidiary of Daiwa Securities Group, one of the largest brokerage and financial services groups in Japan, employing more than 15,000 professionals across more than 20 countries. Following the expansion of the firm’s range of services through the acquisition of parts of KBC Financial Products in 2010, the firm explored a number of options to replace its aging mainframe back office system. Real-time, event-driven Inferno became a candidate for its replacement alongside traditional back office systems’ vendors.
According to Matthew Hargreaves, Chief Information Officer of Daiwa Europe, Inferno excelled in a number of critical areas which led to its choice for the mainframe replacement. Importantly, the system is used elsewhere in the group, covering US convertibles, derivatives and HK warrants as well as meeting the London securities requirements. Having the ability to handle securities and derivatives trades within a single solution avoids the issues of integrating silo systems and enables operations to be streamlined. The depth of functionality which includes general ledger trade accounting and the ability to centrally reconcile cash, positions and trades was also an important factor in choosing Inferno.
Mr Hargreaves commented: “Inferno is a one stop shop where you go for everything. No matter what the product or whether you are in finance, compliance, middle or back office, the suite of functions you need are all in one place – and it is comparatively easy to add new ones. The application is well designed and the Torstone team uniquely able to drill into the detail of both technology and business, which very much simplifies the working relationship.”
Daiwa Europe’s Head of Operations, Jim Baseley, explained further: “Inferno includes core market standard functionality and has a flexible architecture which makes adjusting products or adding new ones and adapting to market conditions easy to do.”
Inferno Reconciliation now provides visibility across multiple asset classes and was the first stepping stone in moving the equity and fixed income business from the mainframe onto Inferno. Having all positions reconciled in one place also provides a central source of accurate data, which simplifies regulatory reporting requirements.
Brian Collings, CEO of Torstone Technology said: “We are delighted that Daiwa Europe is consolidating its back office operations on Inferno. Torstone is rapidly gaining recognition as a new force in back office solutions because of Inferno’s flexible technology and breadth of functionality across multiple assets. We also believe that we offer a fresh and agile approach to support which is in keeping with the responsive demands of the financial services industry.”