Message Automation Derivatives STP enables the straight-through processing (STP) of Over-the-Counter (OTC) derivatives using FpML-based technology. It helps financial firms overcome issues such as a lack of bilateral communications, low levels of data accuracy, high levels of manual processing, large processing costs and lengthy time to bring new instruments to market.
Message Automation Derivatives STP ensures industry compliance, works across multiple asset classes and prepares clients for bilateral communication of trades using the new FpML over SWIFTNet service. It is built around the FpML standard and works with Microsoft BizTalk Server 2006. The solution combines a number of sophisticated software components to help financial firms bring new instruments to market faster, reduce human intervention and achieve greater volumes quickly.
"Processing OTC derivatives is currently a multi-million dollar problem for financial institutions across the globe and while banks have automated almost every other area of post-trade processing, derivatives is one where they are still losing significant sums of money," says Hugh Daly, chief executive officer, Message Automation. "The main complaint we hear from banks, hedge funds and asset managers is that up until now they have found it difficult to alleviate the high levels of manual processing involved, which leaves them with high error rates and huge costs. The work we have done with both Microsoft and Swift has enabled us to tackle some of these challenges and we can now present a complete solution to help solve these issues."
Message Automation Derivatives STP components include:
Message Automation Translator, which extracts and converts data from legacy systems, databases, CSV files or queues. It injects and extracts trades into and out of the Derivatives STP solution in FpML format.
Message Automation Validator, which authenticates trade information against FpML business validation rules to ensure compliance. It checks information against in-house rules to protect data quality.
Message Automation Mediator, which is the only XML matching engine that can match any derivatives product from any asset class using a highly efficient, rule driven, structure matching algorithm.
Derivatives STP marries the workflow control and orchestration capabilities of Microsoft BizTalk Server 2006 to the data transformation and quality control of the Message Automation Translator and Validator products, as well as the leading-edge Mediator derivatives matching engine. It enables financial institutions to manage the derivatives STP process from start to finish, working from trade capture through to downstream applications and ultimately external parties.
"Microsoft is committed to working with its partners to help deliver the most cost effective and efficient solutions to industry issues such as automating derivatives processing," says Sheida Hadji-Ashrafi, industry manager, financial messaging and payments, EMEA, Microsoft. "The work Message Automation has been doing in this space has seen them develop software that, when coupled with BizTalk Server, provides customers with the most effective way of connecting to Swift and achieving straight-through processing of derivatives confirmations. It really could be the breakthrough that financial institutions need for their OTC derivatives operations."
As a Microsoft partner, Message Automation is exhibiting on booth L07 at SIBOS 2006. The company will be demonstrating its Derivatives STP solution as well as providing strategic advice to companies looking to automate their derivatives function.