putting stp theory into stp practice

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Putting STP Theory into STP Practice

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Putting STP Theory into STP Practice. Introductions & Agenda. Agenda Overview Q&A. Introduction. FMCNet is a real-time , single system solution for the communication of trade information between Investment Managers Brokers Custodians - PowerPoint PPT Presentation

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Page 1: Putting STP Theory into STP Practice

Putting STP Theory into STP Practice

Page 2: Putting STP Theory into STP Practice

Introductions & Agenda

Agenda—Overview—Q&A

Page 3: Putting STP Theory into STP Practice

Introduction

FMCNet is a real-time, single system solution for the communication of trade information between— Investment Managers— Brokers— Custodians

Broker allocations, confirms, matching and delivery of settlement instructions across multiple instrument types

FMCNet is an ASP service that provides:— Automated ETC, Local and Central Matching— Integrated SSI Database— Industry standard formats, XML and ISO 15022— Integrated middleware, translations and format transformations— Supports trade & settlement (Omnibus) blocks

Page 4: Putting STP Theory into STP Practice

Hosted STP Infrastructure

Manager

Interestedparties

Custodian

Broker

Swift

Othernetworksor media e.g. fax

TradeSuite &

MISYS

FMCNet

Delivery InstructionData Base

ETC, Local & Central - Match

NOE

Allocations

Confirm

NOE

Allocations

Confirm

Pre and postmatch advice

Match

AffirmSettlementadvice

FIX

Page 5: Putting STP Theory into STP Practice

The Services You Need minus the Complexity

Manager

Interestedparties

Custodian

Broker

Swift

Othernetworksor media e.g. fax

TradeSuite &

MISYS

FMCNetServicesMatching

SSIRules

NOE

Allocations

Confirm

NOE

Allocations

Confirm

Pre and postmatch advice

Match

AffirmSettlementadvice

FIX

Transformation Layer

Non-Sequential Trade Flow

Page 6: Putting STP Theory into STP Practice

Instruments Processed (include)

Equity Bonds •MBS Notes OptionsCommonPreferredConvertible PrefUnitConvertibleInterconvertibleCommon

Eligible BillsForward Rate AgreementFloating Rate AgreementFX:Same DayNext DaySpotForwardCurr Swaps

Sinking FundExtendible / RetractableConvertiblePerpetualPass Through CertLevel Principal InterestCallableSingle Coupon, etcResidue OnlyGiltsStepSerialFloating RateIndex Part of Equity Swap Floating Part of EquitySwapSwap NotionalPayment in Kind

Fixed RateAdjustable RateInterest only- Principal & NotionalPrincipal Only StripGraduated ABS

Asset-Backed SecAccrual BondPrincipal Only StripInterest Only (Notional & Principal)

Interest BearingTerm DepositCert of DepositSWAP DepositMunicipal NoteDiscount LoanProvisional T BillTreasury BillDisc Commercial PaperDisc Promisory Bearer Depository Banker’s AcceptanceShort-term Inv FundCall Loan

Level Principal Interest

Call & Puts for:CommoditiesFuturesBondsCurrencyAmericanEuropean

ValuePriceAverage

FX / Deal CMO •Mortgage Index

Page 7: Putting STP Theory into STP Practice

FMCNet – SSI Database (DIDB)

—Dynamic enrichment of trades with counterparty SSIs

—Fully integrated and free of charge—Counterpart settlement instructions easily

maintained in a single location—Fully structured and ISO 15022 compliant—Comprehensive on-line help

Page 8: Putting STP Theory into STP Practice

– SSI Database (DIDB)

Page 9: Putting STP Theory into STP Practice

The Need to Harmonize Standards

Delivery InstructionData Base

Delivery InstructionData Base

Interestedparties

Interestedparties

CustodianCustodian DTC* & MISYS

DTC* & MISYS

ManagerManager Broker

Othernetworksor media e.g. fax

Othernetworksor media e.g. fax

SWIFTSWIFT

NOE NOE

Allocations Allocations

Confirm Confirm

Pre and post match advice

Settlement advice

Match

Affirm

MatchLocal - - Central

FMCNetFMCNet

• FIX 4.0-4.4

• ISO 15022

• Proprietary

• Flat file

• XML

• FIX 4.0-4.4

• ISO 15022

• Proprietary

• Flat file

• XMLF

MC

Net

Mid

dlew

are

Page 10: Putting STP Theory into STP Practice

Single global post-trade solution

Greater instrument & SSI support Fully integrated solution

— Single development effort Enterprise wide processing from a single

business unit— Business & user segregation

Single ‘pipe’ from block to Custodians, sub custodians and interested parties—FMCNet moving into the pre-trade space

Page 11: Putting STP Theory into STP Practice

Ease & Speed of Deployment

Rapid integration through FMCNet middleware ASP web-hosted solution

— Global implementation with no hardware or software requirements

— Leverage of existing infrastructure Single global business unit Limited client IT resource requirements Proven FMC implementation experience Web training

Page 12: Putting STP Theory into STP Practice

Aggregation for Omnibus Trading

Trade & Settlement Blocks for program / trust / bulk / omnibus trading— Reduction – confirmation volumes— Reduction – depository & settlement costs— Reduction – FMCNet message costs— Reduction – investment manager costs

37% of 810,000 trades per day in USA

Page 13: Putting STP Theory into STP Practice

Flexible Web-Based Reporting

Customized intra-day & inter-active reporting system that is flexible, easy to use & affordable.—Settlement Reporting—Billing Reconciliation—Affirmation Analysis—Commission Reporting—Archive Confirm Records

Page 14: Putting STP Theory into STP Practice

Greater Flexibility

FMCNet is a non-prescriptive solution that supports the requirements of each individual client— ETC, Local or central matching (by market, by

counterpart, by instrument type – ‘mix & match’)— User and market defined matching tolerances— Preferred client data formats / standards— Single or multiple business units

Page 15: Putting STP Theory into STP Practice

Paying For Post-Trade ETC and ETS Services Today

CEO / CTO / CFO

KITKIT

ITIT

OPSOPS

OtherOther

KITKIT

ITIT

OPSOPS

OtherOther

CEO / CTO / CFO

Hardware Middleware Softwareupgrades

Network IT Support License fees

Transaction costs

Annual / monthly base fee

SSI database

IT project resource

BCP Time

Typical costs

Page 16: Putting STP Theory into STP Practice

CEO / CTO / CFO

KITKIT

ITIT

OPSOPS

OtherOther

KITKIT

ITIT

OPSOPS

OtherOther

Typical costs

CEO / CTO / CFO

Hardware Middleware Softwareupgrades

Network IT Support License fees

Transaction costs

Annual / monthly base fee

SSI database

IT project resource

BCP Time

By outsourcing the IT process to ASP, you outsource the pain !

Not Paying For With Post-Trade Services Tomorrow

Typical cost SAVINGS

Page 17: Putting STP Theory into STP Practice

FMCNet Contact Info

Jose Manso Vice President, FMCNet, USA +1 (646) 213-7178 (office) +1 (917) 658-1131 (mobile) [email protected]

Website: www.ssctech.com