Exchange Traded Derivatives (ETDs) represent a significant operational issue for buy-side firms due to their complexity and rising transaction volumes as the impact of the MiFID regulation sees more OTC instruments pushed onto exchanges.
ETDs complexity both in terms of legal and underlying instruments represents a significant risk to institutions that lack the visibility into the underlying value of contracts. With different processing times and triggers, multiple contracts, manual processes and an increased number of reconciliations, standard systems struggle to provide the control demanded by institutions.
SmartStream’s TLM solution for ETD processing, available as a standalone solution, or within TLM Reconciliations-Premium, addresses these challenges. It delivers an extensible data model and ensures every data element can be represented, tracked, managed and reported. This supports the vast amount of data required to perform an ETD derivative match and manage the transaction throughout its lifecycle.
The TLM 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 TLM, 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.