Source: Anvil Software
Anvil Software, the leader in trading and risk management systems for multiple asset classes, credit, repos and securities lending, has added a back office module to the ARTS system, giving clients the option of benefiting from enhanced straight-through processing (STP) capabilities for repo and securities trading.
Originally a bespoke development for HypoVereinsbank (HVB), the back office module has been further enhanced and is now being rolled out to other ARTS clients.
Klaus Kainz, HVB Manager of Repo/Securities Lending Operations in Munich, says that the back office module allowed the bank to explore the full capabilities of the ARTS system. "One of the things traders like about ARTS is that it enables them to execute a high volume of trades. However, those trades need processing, and increased volume creates extra work for the back office. This new module greatly simplifies that process, enabling us to handle the kind of volume the front office produces."
Since implementing ARTS, including the back office module, in Munich, HVB trading volumes have increased dramatically. "The work Anvil has done has significantly aided the expansion of our presence. With the ARTS back office module in place, we can open trading desks in new locations and feed all trades through the back office in Munich, with global position monitoring and risk management," says Eduard Cia, HVB managing director, head of short term interest rate desk.
Now Anvil clients can combine the powerful and popular front- and middle-office capabilities for which ARTS has been long renowned, with back office settlements and workflow functions – a total front-to-back solution for repo and securities lending.
Says Malcolm Clark, London-based director at Anvil: "With the addition of the back office module, trades can be carried seamlessly through the complete lifecycle of a trade from front to back office. People have been looking for a system which can speed up the entire process; we have worked closely with HVB to achieve this and now we are providing it to other clients as well. Covering all the aspects of repo and securities finance trading sets us apart from the rest of the market because no one else provides such a comprehensive and integrated level of functionality."
The back office module comprises four components which work seamlessly with the existing ARTS suite:
Settlement Instructions and Pre-Advice; this component accurately records detailed and complex settlement instructions, with any number of corresponding clearing banks along the chain. A rule-driven default structure ensures that ARTS offers the most likely settlement instruction as a default on each trade.
Trade Workflow provides a configurable series of approval states through which a trade must progress in order to generate settlement instructions, combined with powerful tools for monitoring and promoting trades on a single or mass-process basis.
Payment Posting and Reporting provides a payments management process for all non-settlement-related cash movements, such as dividends, coupons and periodic fee or interest payments.
Confirmation Workflow, which monitors confirmations generation and receipt, including a flexible escalation process to highlight missing confirmations where local regulations require.
"With so much interest in the securities finance and repo market at the moment, it is important that trading organisations have the best technology," concludes Clark. "By introducing a back office module to match the very successful front and middle office modules we already offer, we can ensure that our clients can streamline their transaction processing and do not have to rely on back office legacy systems for that final stage."