Swift, the financial messaging provider for more than 10,000 financial institutions and corporations in 212 countries and territories, announced today that its Affirmations application supports compliance with EMIR by making multi-asset class electronic confirmation matching accessible to players of all sizes.
Currently, many foreign exchange (FX), money market (MM), derivative and commodities transactions are confirmed by email or fax, or not confirmed at all. The operational and settlement risks introduced by this manual process are unacceptable in today's environment, and the regulators want to see them eliminated.
Article 11 of EMIR (in force since March this year) is concerned with risk mitigation for non-centrally cleared OTC derivatives, and requires "the timely confirmation, where available, by electronic means, of the terms of the relevant OTC derivative contract". In light of EMIR, there is a clear need to ensure all client trades are confirmed with an electronic audit trail.
Paul Taylor, Director, Global Matching, SWIFT, comments: "Under the terms of EMIR, investment banks need to automate the processing of confirmations not just with their market side counterparty brokers, but also with their investment manager and corporate buy side clients. SWIFT's Affirmations solution, implemented in conjunction with Alliance Lite2 and Accord, serves the requirements of both sell and buy side firms and makes automating treasury confirmations easy and cost-effective for all market participants. Connection via Alliance Lite2 also presents underlying clients with the opportunity to use all the other services SWIFT has on offer."
SWIFT's Affirmations application, implemented in conjunction with Alliance Lite2 for easy, low-cost, secure, cloud-based SWIFT access, provides a quick to implement solution to support EMIR compliance. Delivered via SWIFT's Accord matching application, it gives users such as investment managers and corporates a single screen view of the details of all their trades with all their counterparties, and enables them to accept or reject them with a simple mouse click.
By using Affirmations, firms can reduce the time during which there is uncertainty about a trade. Faster error detection prevents delays in processing, enabling better management of exposure and reducing settlement risk. Affirmations reduces operational effort, manual intervention and risk from errors due to reliance on faxes or emails. Since Alliance Lite2 and Affirmations are operated centrally by SWIFT, no internal IT support is required, and little or no technical change is imposed on the affirming party.
Affirmations supports multiple asset classes - FX, FX options, money market instruments and interest rate swaps.