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Sibos 2010 Amsterdam
Accord - Update & Case Study
Jan Dings, SWIFT
Dennis Sweeney, Newedge Group UK Branch
25 October 2010
Accord overview…...and then there were two!
• SWIFT’s confirmation matching service• One of the first financial SaaS (Software as a Service)• Covering 2 areas
– Accord for Treasury (MT 3xx/600)– Accord for Securities (MT 515)
• Radically different models, one shared infrastructure
Accord: A Family of ServicesSame infrastructure – different service structure
Treasury Securities
Flow model Messages exchanged between the parties, are copied to Accord
Both parties submit messages directly to Accord
Choice Individual: each party takes own decision as to how matching is done (Manually, on Accord, or on local application)
Collective: both parties must be Accord users, to obtain a match
Reporting / integration
Exclusively Real-Time, in pull mode• GUI for operators• InterAct based API, for integration
• Real time towards GUI• FIN-based reports at 15
minutes intervals for integration in back-office applications (push mode)
Accord for Securities - Short Intro
Accord for Securities – Prime/Executing BrokerSolution for hedge fund transactions
Hedge Fund Executing Broker
Prime Broker
Daily Trade report
1. Automated pre-matching,
2. Real time status updates + exception handling on GUI + full
reporting in MT 998
4. Settlement OK
MT515
MT515
MT 998
MT 998
Custodian
Custodian
Agent AgentCSD (PSET)
2. Real time status updates + exception handling on GUI + full
reporting in MT 998
3 . PSET agents’ local code is x-ref to a BIC
in Accord
Accord
Broker
Global
Custodian
Local
Custodian
Local
Custodian
CSD
Settlement OK
[3]
[1]
[2]
1. Broker A trades off exchange with Broker B
5. Accord sends match status updates via (MT998)
[5]
[6]
7. CSD agents’ local code is x-ref to a BIC in Accord
2. Broker A copies trades + settlement info in MT 515
3. Broker B copies Trade & Settlement details in MT 515
4. Accord matches (MT 515) to (MT 515)
[4]
[5]
6. Brokers instruct settlements (MT 54x)
[6][7]
Broker
Accord X-ref table
Accord
MT
515
MT515
MT 998
MT
99
8
Accord for Securities – Broker to BrokerSolution for off exchange transactions
Accord for Securities – Upcoming DevelopmentFeeding Central Counterparties (by Q2 2011)
LCH.Clearnet SWIFTMessaging
Accord
Off-exchange Trade
Confirmation to Accord + match status to
Broker
Matched trade details to CCP
SIX x-clear
EuroCCP
Broker
Confirmation to Accord + match status to
Broker
Broker
Accord for Treasury - UPDATE
Accord for TreasurySingle-slide overview
Accord Subscribers (>475 in 70 countries) • Banks• Brokers • Custodians• Fund mgrs • Corporates(strong growth)
Accordsubscriber ornon- subscriber
• Real-time reporting & exception handling• Integration available for various Back-Office Systems
DealConfirmations:
(MT 300,305,306,320, 330,340,341,360,
361,362,392, MT 600)
Accord• Real-time Confirmation Matching Service • Availability of >99.97% last 5 years• >90K msgs/hour observed matching capacity• Common matching rules + user-defined rules• Financial Liability for Matching results
Copies ofconfirmations
Copies of non-SWIFT data: fax, e-mail, e-FX portals, Broker feeds, Reuters, etc.
SWIFT
Exception Handling using Graphical Interface
Archive Access(e.g. auditor)
Back Office Integration using XML-based API
Accord Central Server
SWIFT
Alliance Gateway
Live DB: confirmations, matching results, operator actions, history, audit trail
Long Term Archival: 11 year online archive
Accord Central Server
Alliance Access
or
Branches / Headquarter accessing their own data, or dividing the work between them
GB
AE
DE
Connectivity: direct or via Service Bureau
Accord for Treasury Accord from the customer’s perspective
Accord Update and Case Study - Sibos 2010
Total overhaul will start in 2011
– research phase ongoing.
Mission: create the best possible
matching system
Accord for Treasury Product Evolution
Accord for Treasury – Update 2010 2/4Extending Accord into Commodities
• MT 600: Commodity Trade confirmation– Traditionally limited to Gold/Silver, the Standard for
MT 600 now allows for base metals, palm oil– Avoid confirming commodity trades with MT 300 containing CCY
code XAU!• Matching on Accord scheduled for delivery in Q4 2010
– Matching rules agreed with members of a Commodities working group
• Same architecture as Accord for Treasury: messages exchanged with counterparty, and copied to Accord
Accord for Treasury – Update 2010 3/4Multi-matching for allocations
• Sophisticated Many-to-Many matching for complex allocation scenarios
• Optional Accord add-on module, currently tested with leading FX Broker
• Capable of: – Assigning matched status to sets of n messages sent with m messages received, for the same trade, where the two parties involved indicated the allocation in different ways
– Interpreting reversed trades sent by one party as equivalent of cancellation sent by other
– Flexible rounding mechanism – Very user-friendly reports
Accord for Treasury – Update 2010 4/4New Training and Consultancy offerings
• New customers joining Accord service• Accord Business Training for New Users
• Refresher consultancies• Accord refresher (staff rotation, new functionality...)
• Accord for Supervisors (workflow, control, team optimisation)
• Making the most of Accord (less known, advanced features...)
• Usage optimisation• Accord Health Check - Optimise your Treasury Operations
• Rich usage statistics generated & explained by Accord expert• Peer comparison + own evolution • Pinpointing internal / external root causes +
action plan to address problems• 3 year contractNEW!
NEW!
Accord for Treasury – Plans for 2011 Preparing for the total overhaul
• Further GUI enhancements• GUI migrated to WebPlatform to ease installation:
1 single, serving all users
SAB-1
Accord GUI-1
SAB-2
Accord GUI-2
SAB-3
Accord GUI-3
SAB-...
Accord GUI-...
Web Platform
Accord GUI
Accord for Treasury Case Study - Newedge
Newedge Case StudyTimeline -1
• 3Q-4Q 2007:Initial contacts with Fimat. Contract with matching solution up for renewal early 2008. Advantageous Accord pricing through traffic aggregation with Société Générale group
• January 2008: – Fimat becomes Newedge– Accord activated in parallel with existing solution– Newedge allocation pattern requires immediate specific solution– SWIFT designs and delivers semi-automated solution
• February 2008: – Solution validated – tested in parallel with previous solution,
Accord appears to be significantly faster– Accord + Excel program becomes standard solution
Newedge Case StudyTimeline -2
• Q2-2008:Accord Brick Pricing introduced. Cost of matching FX/MM Accord drops drastically for larger customers / groups
• 2009:Fully automated “Multimatching” solution designed in discussionwith Newedge
• 2010:Gradual overhaul of Newedge SWIFT infrastructure– Multi-Matching solution developed for new infrastructure
• September 2010:Fully automated version deployed at Newedge, realising significant further efficiency gains
MultiMatching ProgrammeFeatures and demo
• A standalone, fully automated black box program using Accord API
• For allocated trades: assigns matched status to sets of n MT300 sent with m MT 300s received, for the same trade
• Understands reversed trades sent by one party as equivalentof cancellation sent by other
• Flexible rounding mechanism
• Very user-friendly reports
Overview of un-matched items, including allocations
NEWGGB2LXXX
Execute the multi-matching application
NEWGGB2LXXX
Multi-matched (allocated) items disappear from the listof items that require manual intervention
NEWGGB2LXXX
PDF reports are available and provide a full audit trail
Questions & answers
?
Thank you