Frances Maguire
Frances Maguire

Tracking new developments in currency derivatives processing

Increasing numbers of banks, asset managers, pension funds, hedge funds, and corporates are looking to ramp up their use of currency derivatives, both for hedging purposes as well as a component of their fund and investment management strategies. Although great strides have been made in automating much of the processing and workflow associated with Over The Counter derivatives, much still remains to be done, particularly with regard to cost savings and risk management.

Much has been achieved in attaining straight through processing for vanilla FX products and options, and now with volumes increasing the focus is one cost efficiency, and cost per trade, and the smooth operations of processing so that exceptions are managed efficiently. The recent crisis has not only made banks focus on the operation risk of failed trades, but also reputational risk, where failed trades can impact credit and counterparty risk management.Messaging The world’s leading financial market messaging standards organisations have been collaborating since 2008 to create a financial messaging Investment Roadmap. This collaboration – by Financial Products Markup Language/International Swaps and Derivatives Association, (FpML/ISDA), FIX Protocol Ltd (FPL), the International Securities Association for Institutional Trade Communication (ISITC) and Swift  – lays the groundwork to establish one common financial messaging standard, ISO 20022, while maintaining the existing independent...continued

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