Thunderhead, the provider of highly usable, multi-channel document generation technology, today announced the launch of its XML transformation tool for OTC derivatives contracts which enables the creation of Financial Products Mark-up Language (FpML) trade confirmation messages that are compatible with The Depository Trust & Clearing Corporation’s (DTCC) format for real-time trade matching.
Thunderhead has utilised its XML Adapter for DTCC Deriv/SERV to generate XML messages, which have been tested and verified with DTCC Deriv/SERV’s electronic matching and confirmation services.
"This tool puts business users in control of generating industry-standard documentation in DTCC-ready templates and day-to-day post trade processing," commented Martin Davey, CTO of Thunderhead.
The Thunderhead XML Adapter for DTCC Deriv/SERV has been developed in consultation with the investment banking community and DTCC, and enables firms to move rapidly towards realising the reduced risk and cost benefits of straight-through processing (STP) without having to invest in costly, custom system development. This is the first time that technology around FpML generation has been packaged directly for business users, giving them control over the information flow, and allowing business users to combine their market knowledge with a tool capable of understanding their needs.
"We commend Thunderhead in their efforts to promote straight-through processing in the OTC derivatives market," said Bill Hodgson, Vice President, Business Development at the DTCC.
The XML Adapter is a wizard-driven tool which leads business users easily through the process of creating and testing templates that are compatible with DTCC Deriv/SERV electronic messages, guided by official field descriptions, user-friendly tips and help. To further increase operational efficiencies and reduce costs, the wizard automatically validates messages against DTCC and FpML schema rules, so that firms can ensure documents dispatched for real-time matching are free from errors. Furthermore, all messages are validated by Thunderhead against DTCC business rules defined in the various Deriv/SERV specifications; if required, the rules can be further extended by the user. Thunderhead also has the ability to route exceptions to external workflow systems, such as FileNet and Tibco, for manual correction or resubmission.
Bridging the gap between internal data sources (such as trading or back office systems) and an outgoing confirmation to Deriv/SERV is now simpler; the Thunderhead XML Adapter can retrieve data from internal systems directly, and make the trade data (and other events) available to the business user.
The XML Adapter handles the following transaction types: New Trade Matching/Confirmation, Full Termination, Partial Termination, Increase, Assignment, Amendment and Exit. It supports the following product types: Credit Default Swap Short, Credit Default Swap Index, Equity Share Options, and Equity Index Options. In addition, XML Adapter upgrades will be synchronised with new DTCC releases, enabling users to be automatically kept up to date with the latest versions and products from DTCC.
"We are excited about our latest development for the Investment Banking community. This tool further enhances Thunderhead’s document generation solution and assists clients to adopt a step-by-step migration from traditional to electronic methods of communication," said Martin Davey. "The XML Adapter for DTCC Deriv/SERV is part of Thunderhead’s XML Data Channel initiative, which is extendable to all types of industry-standard XML schemas, including schemas based on ebXML, such as EFETnet (European Federation of Energy Traders)."
"Investment banks, hedge funds and other trading organisations are demonstrating a strong demand for solutions that eliminate slow and costly manual confirmation processing and as a result, Thunderhead is already working with clients to deploy the Thunderhead XML Adapter for DTCC Deriv/SERV," commented Glen Manchester, CEO of Thunderhead. "Thunderhead's ability to combine true business user control of the trade confirmation template management process and enable electronic matching of over-the-counter derivatives trade confirmations in real-time will reduce both costs and risks for the industry."
The Thunderhead document generation solution provides firms with a single business user-controlled platform from which to unite the testing and production of trade documents and then dispatch them automatically to the counterparty across multiple channels (including print, fax and HTML) and – of course – FpML. In this way, the step-by-step migration of trading parties from fax and paper to electronic methods of communication can also be managed effectively.