SmartStream launches TLM Trade Process Management for OTC derivatives

In response to rising transaction volumes, confirmation backlogs and exception issues caused by manual processes, TLM Trade Process Management for OTC Derivatives automates derivatives transactions from the point of execution through to settlement confirmation.

"The current levels of duplication due to manual processing of derivatives are unsustainable with volumes rising across every contract type. Institutions' front offices are being constrained by their inefficiency in the middle and back office, losing opportunities to generate income," said Steve Miller, Senior Product Manager at SmartStream. "TLM Trade Process Management can help firms overcome these issues by creating an asset neutral, event-driven architecture for processing derivatives throughout their lifecycle."

A packaged solution that incorporates industry best practice in predefined business processes, TLM Trade Process Management for OTC Derivatives creates a volume insensitive derivatives processing environment, flexible enough to cope with changing market and regulatory demands. Available as either an integrated module of TLM Trade Process Management or a standalone solution, it can model and process a range of derivative types, from vanilla swaps through to complex structured products.

TLM Trade Process Management for OTC Derivatives is driven by flexible business rules and state management, tracking transactions throughout their lifecycle against state/time/value. Integrated exception management ensures that any transactions exhibiting potentially erroneous behaviour are identified at the earliest possible stage with an alerting service that highlights actual and potential error conditions to users and external parties.

"The OTC derivatives space is still evolving at a rapid rate so firms, particularly on the buy-side need a flexible solution capable of meeting today's immediate requirements but with an eye on future developments," explained Miller. "TLM delivers complete control to what is currently a chaotic and unruly environment ruled by Excel spreadsheets, faxes and reams of paper. Its little wonder the front office is constricted when the middle and back office is struggling to cope. With TLM firms gain a flexible platform to provide rapid connectivity and integration with in-house and third party applications, utilities and services. Its exceptions-based workflows ensure firms can gain visibility into their derivatives operations, their liabilities, risks, funding requirements and, crucially, support their front office's ambitions."

Separately, SmartStream Technologies, the transaction lifecycle management specialist, today announced that the European Asset Management division of a leading European Bank has gone live on TLM Trade Process Management, delivering a single integrated system for its post-trade environment.

The bank serves a range of institutional clients, mutual funds and insurance companies. It wanted to replace a geographically oriented middle and back office environment of order management, confirmations, cash forecasting, settlement, fund accounting and reconciliation systems that were duplicated across asset classes and offices. This had led to different procedures and systems being used depending on where a trade was executed.

It selected SmartStream's TLM Trade Process Management to deliver a single, global platform capable of processing equities and bonds in a consistent and coordinated manner. The TLM solution captures the trade from point of execution creating a T+0 confirmation via either a virtual matching utility or local matching where required.

To reduce operational risk and cost and to ensure the bank meets internal and customer SLAs and market deadlines, TLM Trade Process Management delivers cross-asset, pre-emptive exception management and alerting. It will support industry standards including Markit Wire, DTCC Deriv/SERV, Omgeo CTM and FpML over SWIFTNet.

Christian Schiebl, Regional Director, Europe, SmartStream Technologies, stated: "The middle and back performs a critical control function. However with a mixture of legacy systems and manual processes they are unable to keep pace with the front office's ambitions. Further, with rising transaction volumes, these processes introduce unnecessary risk and cost. Using TLM Trade Process Management to replace a variety of systems and processes, this leading European bank has created a single, scalable processing platform that can be shared by a global operation to significantly increase its post-trade processing efficiency."