A Global Investment Bank reduces cost and avoids penalties by proactively correcting hundreds of trade reporting defects at the source.
This Global Bank is a major swaps dealer, and thus is mandated to report on more than 1,000,000 open derivatives positions every day. Due to the complex nature of their portfolio – which spans a wide array of asset classes and jurisdictions – most data quality problems were only being isolated after the fact, usually in the form of a NACK from the Trade Repository [TR].
The Bank is currently evaluating Validate.Trade as part of an overall upgrade to its development, testing and business support services for Derivatives Trade Reporting. During the evaluation, the Bank discovered that a crucial FpML “Exit” message, which was necessary to report the close out of an equity derivatives position, was not getting processed by their TR. With no response received, it was impossible for the Bank to understand the state of a crucial trade report.
Instead of calling the TR to initiate what could have been a lengthy and costly diagnostic exercise, the Bank passed the problematic “Exit” message into Validate.Trade. Validate.Trade applied the appropriate rules from more than 8,000 in its rule base to quickly isolate the elements within the message that needed to be repaired.
Using the intuitive Risk Focus interface, the Bank was able to edit and re-validate the message to ensure its acceptance by the TR. The Bank then went back to the source system that produced the original message, made the appropriate change, and was able to successfully send the message to the DTCC.
The Bank had hundreds more equity derivatives positions to close out that day, to which they applied the same fix. In order to avoid further problems, the Bank first passed all of the Exit messages through Validate.Trade to ensure that they would be accepted by the GTR, before sending them to the TR. All were accepted and generated ACKs.
Problem averted, quickly and transparently.